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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Jan. 01, 2017
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES |
(5) | COMMITMENTS AND CONTINGENCIES
Lease Commitments As of January 1, 2017, the future minimum rental commitments for all non-cancelable leases are as follows (in thousands):
|  | Operating |  |  | Capital |  |  |  |
|  | Leases |  |  | Leases |  |  | Total |
2017 |  | $ | 45,279 |  |  | $ | 823 |  |  | $ | 46,102 |
2018 |  |  | 40,586 |  |  |  | 826 |  |  |  | 41,412 |
2019 |  |  | 34,832 |  |  |  | 828 |  |  |  | 35,660 |
2020 |  |  | 29,087 |  |  |  | 831 |  |  |  | 29,918 |
2021 |  |  | 25,427 |  |  |  | 833 |  |  |  | 26,260 |
Thereafter |  |  | 55,916 |  |  |  | 5,179 |  |  |  | 61,095 |
Total future minimum rental commitments |  | $ | 231,127 |  |  |  | 9,320 |  |  | $ | 240,447 |
Less – amounts representing interest |  |  |  |  |  |  | (3,590 | ) |  |  |  |
Total principal payable on capital leases |  |  |  |  |  | $ | 5,730 |  |  |  |  |
Legal Proceedings and Related Matters The Company is a party to lawsuits, revenue agent reviews by taxing authorities and legal proceedings, of which the majority involve workers’ compensation, employment practices liability, general liability and automobile and franchisee claims arising in the ordinary course of business. The Company records legal fees associated with loss contingencies when they are probable and reasonably estimable. Litigation is subject to many uncertainties, and the outcome of individual litigated matters is not predictable with assurance. Included in the ordinary course litigation matters referenced above, the Company is party to three employment practice cases and two casualty cases. The Company has established legal and insurance accruals for losses relating to these cases which management believes are reasonable based upon their assessment of the current facts and circumstances. However, it is reasonably possible that the ultimate losses could exceed the amounts recorded by $6.9 million. The remaining cases referenced above could be decided unfavorably to the Company and could require the Company to pay damages or make other expenditures in amounts or a range of amounts that cannot be estimated with accuracy. In management’s opinion, these matters, individually and in the aggregate, should not have a significant adverse effect on the financial condition of the Company, and the established accruals adequately provide for the estimated resolution of such claims. On February 14, 2011, Domino’s Pizza LLC was named as a defendant in a lawsuit along with Fischler Enterprises of C.F., Inc., a franchisee, and Jeffrey S. Kidd, the franchisee’s delivery driver, filed by Yvonne Wiederhold, the plaintiff, as Personal Representative of the Estate of Richard E. Wiederhold, deceased. The case involved a traffic accident in which the franchisee’s delivery driver is alleged to have caused an accident involving a vehicle driven by Richard Wiederhold. Mr. Wiederhold sustained spinal injuries resulting in quadriplegia and passed away several months after the accident. The jury returned a $10.1 million judgment for the plaintiff where the Company and Mr. Kidd were found to be 90% liable (after certain offsets and other deductions the final verdict was $8.9 million). In the second quarter of 2016, the trial court ruled on all post-judgment motions and entered the judgment. The Company denies liability and in the third quarter of 2016 filed an appeal of the verdict on a variety of grounds. On September 11, 2012, Domino’s Pizza LLC was named as a defendant in a lawsuit along with MAC Pizza Management, Inc., a large franchisee, and Joshua Balka, the franchisee’s delivery driver, filed by Raghurami Reddy, the plaintiff. The case involved a traffic accident in which the franchisee’s delivery driver collided with another vehicle, where the driver of the other vehicle sustained head injuries and the passenger of the other vehicle sustained fatal injuries. The jury delivered a $32.0 million judgment for the plaintiff where the Company was found to be 60% liable. The Company denied liability and filed an appeal of the verdict on a variety of grounds. In the first quarter of 2015, the appellate court reversed the trial court’s decision and dismissed the claims against the Company. The plaintiff filed a Petition for Review with the Supreme Court of the State of Texas. The Company filed opposition to the writ of review and asserted that the claims were appropriately dismissed by the Court of Appeals of the State of Texas. In the second quarter of 2016, the Texas Supreme Court rejected the plaintiffs’ writ of certiorari, leaving the appellate court’s favorable decision to stand. During the fourth quarter of 2016, the Plaintiff filed a petition for writ of certiorari with the United States Supreme Court. In the fourth quarter of 2016, the United States Supreme Court denied the writ of certiorari. Plaintiff has exhausted all appellate rights and the Texas Court of Appeals order dismissing all claims against Domino’s Pizza LLC stands.

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