Trace Elements, Inc. v. MacKensen reinforces Florida’s strict-compliance rule for proposals for settlement
Mark R. Osherow, Esq.
Florida’s proposal-for-settlement procedure remains one of the most powerful—and unforgiving—fee-shifting tools in Florida civil litigation. In Trace Elements, Inc. v. MacKensen, No. SC2024-1274, 2026 Fla. LEXIS 1011, 2026 WL 1901612, 51 Fla. L. Weekly S197 (Fla. July 2, 2026), the Florida Supreme Court held that a joint proposal for settlement must apportion the amount and terms attributable to each party under Florida Rule of Civil Procedure 1.442(c)(3), even when the proposal concerns a single, unified claim for undifferentiated damages. The Court quashed the Fourth District’s decision in MacKensen v. Trace Elements, Inc., 388 So. 3d 815 (Fla. 4th DCA 2024), and approved the Second District’s contrary decision in Cobb v. Durando, 111 So. 3d 277 (Fla. 2d DCA 2013). The opinion is especially important because it rejects what many practitioners viewed as a practical and common-sense exception: an unapportioned offer by married co-owners asserting one indivisible claim. After Trace Elements, that exception does not exist unless the rule itself is amended.
The facts and procedural posture
Wolfgang and Nadja Mackensen, a married couple, contracted with Trace Elements, Inc. for professional design services relating to renovations of their vacation rental property in Vero Beach. After Trace Elements allegedly terminated performance prematurely, the Mackensens sued for breach of contract and unjust enrichment. Trace Elements countersued for breach of contract and tortious interference with a business relationship.
Before trial, the Mackensens served a proposal for settlement offering to accept a total lump sum of $10,000 from Trace Elements in full settlement of the action. The proposal did not allocate any amount separately to Wolfgang or Nadja. Trace Elements rejected the proposal. The case proceeded to trial, where the jury awarded the Mackensens $41,273.70 on their breach-of-contract claim. The Mackensens then sought attorney’s fees and costs under section 768.79, Florida Statutes. The trial court denied the motion, finding the proposal invalid because it failed to comply with Rule 1.442(c)(3)’s apportionment requirement.
The Fourth District reversed. It acknowledged the apportionment language in Rule 1.442(c)(3), but held that the Mackensens’ proposal involved a “unified, single claim” and therefore did not require apportionment. MacKensen v. Trace Elements, Inc., 388 So. 3d 815, 817 (Fla. 4th DCA 2024). The Florida Supreme Court accepted conflict jurisdiction because that ruling directly conflicted with Cobb v. Durando, 111 So. 3d 277 (Fla. 2d DCA 2013), where the Second District invalidated an unapportioned proposal served by married homeowners against a roofing contractor on a unified breach-of-contract claim.
The general rule: a joint proposal must be apportioned
Rule 1.442(c)(3) provides that a proposal may be made by or to any party or combination of parties, but “[a] joint proposal must state the amount and terms attributable to each party.” The Florida Supreme Court treated that language as controlling. It held that a proposal is “joint” when it is made by or to multiple parties, and that once a proposal is joint, the rule requires apportionment.
The Court relied on a long line of strict-compliance decisions. In Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276 (Fla. 2003), the Court invalidated an unapportioned proposal made by multiple plaintiffs to one defendant. In Lamb v. Matetzschk, 906 So. 2d 1037 (Fla. 2005), the Court invalidated an unapportioned proposal made by one plaintiff to two defendants, even though one defendant’s liability was alleged to be vicarious. In Pratt v. Weiss, 161 So. 3d 1268 (Fla. 2015), the Court invalidated an unapportioned proposal made by two defendants to one plaintiff. In Audiffred v. Arnold, 161 So. 3d 1274 (Fla. 2015), the Court invalidated a proposal that purported to resolve claims involving additional parties not properly apportioned in the proposal.
The Supreme Court viewed Trace Elements as a straightforward application of those precedents. The proposal came from two distinct plaintiffs, Wolfgang and Nadja Mackensen. It offered one lump sum. It did not attribute any separate amount or term to either plaintiff. That was enough to make the proposal invalid under Rule 1.442(c)(3).
The Court rejects the “unified, single claim” exception. The central holding of Trace Elements is that Rule 1.442(c)(3) requires apportionment even for a joint proposal concerning a unified, single claim. The Court expressly rejected the Fourth District’s conclusion that a unified claim eliminates the need to apportion.
That holding is significant because the Mackensens presented sympathetic facts for an exception. They were married homeowners. Their claim involved jointly owned property. Their damages were arguably indivisible. The dissent viewed the Mackensens as a legally recognized unit seeking undifferentiated damages, and reasoned that no realistic purpose would be served by forcing a division between them.
The majority was unmoved. It emphasized that Florida’s proposal-for-settlement framework values predictability over case-by-case equitable exceptions. The Court stated that it had not conditioned Rule 1.442(c)(3)’s enforcement on whether apportionment serves a useful purpose in a particular case. Instead, the Court applied the rule based on the multiplicity of parties, not on the relationship among the parties, the nature of their claims, or the practical difficulty of allocation.
Strict compliance, not lack of ambiguity
A key lesson from Trace Elements is that clarity alone is not enough. The Mackensens’ offer may have been understandable. Trace Elements likely knew that the couple was offering to resolve the entire action for $10,000. But under Florida Supreme Court precedent, the test is not merely whether the proposal is ambiguous. The test is whether the proposal strictly complies with the rule. The Court quoted the First District’s observation in R.J. Reynolds Tobacco Co. v. Ward, 141 So. 3d 236, 238 (Fla. 1st DCA 2014), that the Florida Supreme Court has made the test “strict compliance, not the absence of ambiguity.”
That distinction is critical. A proposal can be perfectly understandable and still unenforceable if it fails a substantive requirement of section 768.79 or a rule provision implementing that statute. The Court treated apportionment as one of those substantive requirements because Rule 1.442(c)(3) implements section 768.79(2)(b)’s requirement that the proposal identify the party making it and the party to whom it is made.
Why Kuhajda did not save the proposal
The Mackensens relied on Kuhajda v. Borden Dairy Co. of Alabama, LLC, 202 So. 3d 391 (Fla. 2016), but the Supreme Court found that reliance misplaced. In Kuhajda, the Court held that failure to include the Rule 1.442(c)(2)(F) statement as to whether the proposal includes attorney’s fees and whether attorney’s fees are part of the legal claim did not invalidate a proposal where attorney’s fees were not sought in the pleadings. The reasoning in Kuhajda turned on the fact that the attorney-fee statement requirement did not implement a substantive requirement of section 768.79.
By contrast, the Trace Elements Court reaffirmed that apportionment under Rule 1.442(c)(3) does implement a substantive requirement of the statute. Therefore, Kuhajda does not create a general substantial-compliance doctrine for defective joint proposals. It remains useful for defects in rule-based requirements that do not implement substantive statutory requirements, but it does not excuse failure to apportion a joint proposal.
Recognized exceptions and carve-outs
1. The vicarious, constructive, derivative, or technical liability exception
The principal rule-based exception is Rule 1.442(c)(4). That subdivision was adopted after Lamb v. Matetzschk, 906 So. 2d 1037 (Fla. 2005), where the Court required apportionment even though one defendant’s liability was alleged to be purely vicarious. The rule now provides that when a party is alleged to be solely vicariously, constructively, derivatively, or technically liable—whether by operation of law or contract—a joint proposal made by or served on that party need not state apportionment or contribution as to that party. The Trace Elements Court specifically noted that the proper response to a perceived flaw in Rule 1.442(c)(3) is rule amendment, just as the Court did after Lamb by adopting Rule 1.442(c)(4) in In re Amendments to Florida Rules of Civil Procedure, 52 So. 3d 579 (Fla. 2010).
This exception should be read narrowly. It may apply where the claim against one party is truly derivative of another party’s liability, such as a respondeat superior claim against an employer based solely on an employee’s conduct. It does not apply merely because parties are related, married, jointly own property, share aligned interests, or face coextensive exposure.
2. The property-insurer statutory carve-out
A second carve-out appears in section 768.79(6), Florida Statutes. That subsection provides that, in a breach-of-contract action, a property insurer may make a joint offer of judgment or settlement conditioned on mutual acceptance by all joint offerees.
This is not a broad exception to apportionment for all civil litigants. It is limited to property insurers in breach-of-contract actions. It also addresses joint offers conditioned on mutual acceptance; counsel should not assume it eliminates every Rule 1.442 requirement unless the text of the statute and rule clearly support that conclusion.
3. Defects in purely procedural rule requirements that do not implement section 768.79
A third category is not an apportionment exception, but it matters in proposal practice. Under Kuhajda v. Borden Dairy Co. of Alabama, LLC, 202 So. 3d 391 (Fla. 2016), and Wheaton v. Wheaton, 261 So. 3d 1236 (Fla. 2019), failure to comply with some procedural requirements may not invalidate a proposal if the proposal satisfies the substantive requirements of section 768.79. The dissent in Trace Elements emphasized this line of cases, but the majority held it did not apply because apportionment is treated as a substantive requirement implemented through Rule 1.442(c)(3).
4. A proposal that is genuinely not joint
Finally, no apportionment is required if the proposal is not joint in the first place. A proposal made by one party to one party resolving only the claims between those two parties generally does not trigger Rule 1.442(c)(3). But practitioners should be careful: release language, dismissal language, indemnity provisions, confidentiality obligations, or nonmonetary terms affecting other parties can convert what appears to be a one-to-one proposal into a joint or otherwise defective proposal.
What does not qualify as an exception after Trace Elements
After Trace Elements, Florida practitioners should not rely on any of the following as exceptions to apportionment:
A married-couple exception.
A tenancy-by-the-entireties exception.
A jointly owned property exception.
A unified-claim exception.
An indivisible-damages exception.
A coextensive-liability exception.
A practical-impossibility exception.
The majority specifically rejected the notion that joint ownership of property by spouses alters the strict-compliance requirement. It also noted the Second District’s rejection of similar arguments in Cobb v. Durando, 111 So. 3d 277 (Fla. 2d DCA 2013), and Watkins v. Corbett, 2026 Fla. App. LEXIS 2219, 2026 WL 816637 (Fla. 2d DCA Mar. 25, 2026).
A joint venture is not, by itself, an exception to the apportionment requirement. If multiple joint venturers are separately named parties, a proposal made by or to them generally must allocate the amount and terms attributable to each. A narrow exception may exist under Rule 1.442(c)(4) when a particular venturer is alleged to be solely vicariously, constructively, derivatively, or technically liable for another party’s conduct. Because that inquiry turns on the operative pleadings—and because Trace Elements demands strict compliance—the safer practice is to apportion the proposal or serve separate proposals whenever any plausible allegation of direct liability exists.
The dissent’s practical concern
Justice Sasso, joined by Justices Francis and Tanenbaum, dissented. The dissent reasoned that the Mackensens’ claim was both legally and factually undifferentiated, and that forcing apportionment did not further the purpose of allowing the offeree to evaluate the proposal. The dissent relied in part on the nature of tenancy by the entireties, citing Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001), for the principle that entireties property belongs to neither spouse individually, but to both spouses as a whole.
The dissent also argued that later developments—such as the adoption of Rule 1.442(c)(4), the property-insurer amendment to section 768.79(6), and the Court’s decisions in Kuhajda and Wheaton—show a movement away from overreading procedural defects to defeat otherwise valid statutory rights.
That dissent may be important in future rulemaking. But as binding law, the majority controls. Unless and until Rule 1.442 is amended, unified damages do not excuse nonapportionment.
Practical drafting guidance
The safest practice after Trace Elements is to apportion every proposal involving more than one offeror or offeree unless a specific rule-based or statutory exception plainly applies. For example, instead of offering:
Plaintiffs offer to accept $100,000 in full settlement of all claims.
Two plaintiffs should consider language such as:
Plaintiff A offers to accept $50,000, and Plaintiff B offers to accept $50,000, for a total proposal amount of $100,000, in full settlement of the claims identified in this proposal.
If the allocation is artificial, say so carefully, but still allocate:
For purposes of complying with Florida Rule of Civil Procedure 1.442(c)(3), and without conceding that Plaintiffs’ damages are legally divisible, the total proposal amount is allocated as follows: $50,000 to Plaintiff A and $50,000 to Plaintiff B.
For multiple defendants, the proposal should similarly identify the amount and terms attributable to each defendant, unless Rule 1.442(c)(4) clearly applies. If one defendant is alleged to be solely vicariously liable, the proposal should expressly identify the basis for invoking Rule 1.442(c)(4), but counsel should avoid using that exception unless the liability is truly derivative, constructive, technical, or vicarious.
Bottom line
Trace Elements, Inc. v. MacKensen, No. SC2024-1274, 2026 Fla. LEXIS 1011, 2026 WL 1901612, 51 Fla. L. Weekly S197 (Fla. July 2, 2026), confirms that Florida courts will strictly enforce Rule 1.442(c)(3)’s apportionment requirement for joint proposals. The Supreme Court rejected a unified-claim exception, even for married homeowners asserting an undifferentiated breach-of-contract claim involving jointly owned property. The decision leaves only narrow exceptions: the express vicarious/derivative-liability exception in Rule 1.442(c)(4), the limited property-insurer carve-out in section 768.79(6), and the separate line of cases excusing defects in purely procedural requirements that do not implement section 768.79.
For practitioners, the lesson is direct: if more than one party is making or receiving a proposal, allocate the amount and terms attributable to each party. A proposal that feels clear, practical, and fair may still be unenforceable if it is not apportioned.
