Barbara J. Bundens, (widow of Howard E. Bundens), Petitioner(no. 94-3163) v. J.e. Brenneman Company; Travelers Insurance Company; Anddirector, Office of Workers' Compensationprograms, United States Department Oflabor, Respondents.j.e. Brenneman Company and Travelers Insurance Company,petitioners (no. 94-3175) v. Barbara J. Bundens (widow of Howard E. Bundens) Anddirector, Office of Workers' Compensationprograms, United States Department Oflabor; Benefits Review Board,respondents, 46 F.3d 292 (3d Cir. 1995)

Claimants are the widow and son of a deceased diver and dockbuilder. They appeal the decision of the United States Department of Labor, Benefits Review Board ("Board"), which held that the decedent's employer was not required to pay benefits under the Longshore Harbor Workers Compensation Act, 33 U.S.C. § 901, et seq., ("LHWCA") due to statutory exemption and credit provisions which applied as a result of a court-approved settlement of their previous federal court litigation. The employer has filed a protective cross-appeal solely to preserve its right to have this court examine the employment status of the decedent in the event that we reverse the Board on the release and credit issues.

We will affirm the order of the Board that the decedent was a harbor worker, not a seaman. Although the Board concluded that the employer could receive a full credit under either Sec. 903(e) or Sec. 933(f), we hold that only when these two sections are applied together do they provide a credit to the employer where the apportionment of funds between prior settled claims is unknown. The Board concluded that the "written approval" requirement of Sec. 933(g) (1) does not apply. We will affirm the order of the Board, however, on other grounds. Next, we will affirm its determination that the notice provision of Sec. 933(g) (2) was satisfied by virtue of the employer's participation in the tort settlement. Finally, we will reverse the order of the Board that the claimants are not entitled to any benefits under the LHWCA and remand this case for further proceedings consistent with this opinion.

Howard Bundens ("decedent") was employed by J.E. Brenneman Co. ("Brenneman") as a diver and dockbuilder on a variety of marine construction jobs. On August 29, 1978, decedent had been assigned with other employees of Brenneman to the Monsanto pier on the Delaware River to remove a damaged mooring platform, known as a dolphin. A tug boat towed Brenneman's heavy-lifting derrick barge, the Conqueror, to the Monsanto main pier where it picked up the decedent together with the other members of the crew. Before going down-river to the area of the broken dolphin, the Conqueror attached an anchor cable from its bow to the main pier. The tug then towed the barge some distance past the site of the broken dolphin. At that location, the Conqueror set an anchor off its stern. The tug next brought the Conqueror back near the site of the broken dolphin and departed. By pulling itself with its winches along the cables at its bow and stern, the Conqueror was able to maneuver along the pier to facilitate cutting and removal of the damaged dolphin.

The decedent and other workers performed this work by using torches to cut the steel H-beam supports underneath the dolphin, while the Conqueror's 90-ton derrick supported the weight of the dolphin. The workers did the cutting work from planks fastened to the beams under the dolphin and from float stages, which were floating wooden work platforms about forty feet long. When the dolphin was cut free, the derrick lifted it onto the deck of the barge.

After this task was accomplished, the decedent walked back to the main pier via the shoreline. Meanwhile, the crew made ready to move the Conqueror to a location at Monsanto's main pier where it was to be secured for the night. The Conqueror maneuvered itself down-river to weigh its stern anchor and then pulled itself back up-river along its bow cable approximately 300 feet past the damaged pier to the main pier. Once the Conqueror arrived at the site at the main pier where Brenneman intended to moor her overnight, several lines were heaved to the decedent and another worker on the pier, and the anchor cable at the bow was unfastened.

A strong wind caused the bow of the Conqueror to "hang up" behind a piling at the pier and, simultaneously, the stern pitched out into the river. Decedent went on board the Conqueror to help pull the aft end of the barge closer to the pier. Several workers, including the decedent, rigged an additional mooring line from a point on the pier, around and through various points at the stern of the barge, and along the starboard side. The line continued through a fair lead block, also known as the main snatch block (which was affixed to the deck), and then onto a winch drum or spool. Once the line was through this last fair lead block, the decedent took the end of the line and wrapped it several times around the spool. Due to the tension on the mooring line created by the spool, without warning the fair lead block broke. The decedent was killed almost instantly when he was struck by either a piece of the broken fair lead block or the ruptured line.¹ 

Barbara Bundens ("Bundens"), on behalf of herself, her minor son, Gregory Bundens, and her deceased husband's estate, filed a tort action in the United States District Court for the Eastern District of Pennsylvania on March 13, 1979.²  The next day, Bundens filed a claim for death benefits on behalf of herself and her son under the LHWCA. Bundens contacted the Deputy Commissioner of the Office of Workers' Compensation Programs to request that the LHWCA claim be held in abeyance pending the termination of the federal court action. In the federal court action, Bundens asserted claims against Brenneman both under the Jones Act and as the vessel owner for negligence under 33 U.S.C. § 905(b) of the LHWCA.³  When Brenneman joined additional parties as third-party defendants, Bundens filed suits against these parties as direct defendants.⁴ 

Brenneman filed a motion for summary judgment on December 9, 1981, claiming that as a matter of law the decedent was not a seaman under the Jones Act. Bundens by cross-motion for summary judgment claimed that the decedent was either a seaman under the Jones Act or a harbor worker under the LHWCA. The district court denied both motions.

Extensive settlement negotiations ensued, after which Bundens and all defendants entered into a comprehensive settlement of the federal litigation. The settlement provided for: (1) a Release Agreement ("Release") between Bundens and Brenneman; (2) an Indemnity Agreement ("Indemnity") between the same parties; and (3) a Settlement Agreement and Mutual Release ("Settlement") among all of the co-defendants.

The Release provided that in exchange for one million dollars, Bundens released Brenneman (but not any compensation insurance carrier) from all tort claims arising out of and related to the death of the decedent. The Release was structured in such a way as to preserve Bundens' right to pursue the LHWCA claim for death benefits that had been filed earlier. The Release also preserved any factual or legal contentions that could be raised in the LHWCA proceedings, including a defense by the compensation carrier that its liability had been discharged by virtue of the federal court settlement.⁵ 

The Indemnity was designed to ensure that Brenneman would not have to pay in excess of one million dollars as a consequence of decedent's death. Thus, in the event that Travelers Insurance Company ("Travelers"),⁶  made a claim against Brenneman for reimbursement for any monies paid to Bundens as compensation benefits under the LHWCA, Bundens agreed to indemnify and hold Brenneman harmless from any liability, including counsel fees. The Indemnity anticipated that, if Travelers were to succeed in an action against Brenneman, the amount of benefits already paid to Bundens, combined with Brenneman's costs and counsel fees incurred in defending Travelers' indemnity claim, would not exceed $400,000. Accordingly, the Indemnity specified the sum of $400,000 to be set aside out of the $1,000,000 paid to Bundens under the Release.

The Settlement executed among all of the defendants in the district court litigation dismissed with prejudice all of the Bundens' claims.⁷  It also fixed the respective amount that each defendant would contribute to the $1,000,000 settlement established in the Release.⁸ 

Although Travelers was invited to participate in the settlement negotiations, it declined. After the settlement was reached on June 8, 1983, Travelers filed a motion to intervene in the federal court litigation with the intention of opposing the settlement as an attempt by Bundens to receive a double recovery. The motion to intervene was denied on the grounds that Travelers was not prejudiced by the settlement.

The district court approved the Settlement Agreement and the dismissal of the federal court tort litigation in July of 1983.⁹  Because the lawsuit was dismissed when the parties agreed upon a settlement, the district court never adjudicated whether the decedent was a seaman or a harbor worker.

After the case was settled, Bundens pursued her claim for compensation benefits under the LHWCA. An evidentiary hearing was held before an Administrative Law Judge ("ALJ"), and in January of 1986, the ALJ issued a decision and order concluding that the decedent satisfied all three prongs of the Griffith test for crew member status and was therefore a seaman. Griffith requires that: (1) a worker have a more or less permanent connection with a vessel; (2) the vessel be in navigation; and (3) the worker must be on board primarily to aid in navigation. Griffith v. Wheeling Pittsburgh Steel Corp., 521 F.2d 31, 36 (3d Cir. 1975), cert. denied, 423 U.S. 1054, 96 S. Ct. 785, 46 L. Ed. 2d 643 (1976). The ALJ dismissed Bundens' claim for benefits after concluding that the decedent was expressly excluded from coverage under Sec. 902(3) of the LHWCA because he was a seaman, not a harbor worker.¹⁰ 

On appeal to the Board, Bundens challenged the ALJ's determination that her husband was on board the barge Conqueror primarily to aid in navigation. The Board concluded that the ALJ's finding was neither supported by the record evidence nor applicable law. Accordingly, it reversed the ALJ's finding that the decedent was a seaman excluded from coverage under the LHWCA. The Board additionally noted that it did not need to reach Bundens' challenge to the ALJ's finding that the decedent had a permanent connection to a vessel, because the Board's holding nullified the ALJ's determination of seaman status on other grounds. It remanded the case for the ALJ to determine if Bundens was entitled to LHWCA benefits, and whether Brenneman was entitled to statutory credit under Sec. 903(e) for its payment under the tort settlement agreement.¹¹ 

On remand another ALJ found that Bundens was entitled to benefits under the LHWCA, and rejected Brenneman's argument that it was entitled to a credit under Sec. 903(e). The ALJ reasoned that Brenneman would be entitled to Sec. 903(e) credit only if the tort settlement disposed of the claims under the Jones Act, but not if it disposed of Bundens' Sec. 905(b) claim under the LHWCA. The ALJ further noted that this issue was not decided in the federal litigation.¹²  According to the ALJ, the settling parties intended the nature of the settlement to depend on the decedent's status as a seaman under the Jones Act or as a harbor worker under the LHWCA, as later determined in the LHWCA proceeding. The ALJ concluded that Bundens was a harbor worker,¹³  and that the tort settlement disposed of the claims under Sec. 905(b) of the LHWCA, rather than under the Jones Act. He therefore concluded that Brenneman was not entitled to a credit under Sec. 903(e).

In a supplemental petition for further consideration following denial upon reconsideration, Brenneman argued that the ALJ must revisit the issue of the decedent's employment status in light of recent Supreme Court precedent which eliminated the "aid in navigation" element of the seaman status test. McDermott Int'l v. Wilander, 498 U.S. 337, 353, 111 S. Ct. 807, 816, 112 L. Ed. 2d 866 (1991). Since Wilander was decided after the decisions of the Board and ALJ, the Board could not have considered it when remanding the case. The order of the Board was erroneously premised on the view that because the evidence had not supported the finding of the first ALJ that the decedent did not aid in navigation, he could not be a seaman. On remand, the ALJ acknowledged that the "aid in navigation" element is no longer applicable, but that the decedent was still a harbor worker because: (1) he engaged in traditional longshore (harbor worker) activities; and (2) the barge was not a "vessel in navigation" since at the time of decedent's death, it was simply being secured at the dock for the night. All parties concede that this latter finding by the ALJ was clearly error since Brenneman and Bundens had stipulated to the fact that the barge was a "vessel in navigation."

Brenneman appealed the decisions of the ALJ and also argued that Bundens' compensation claim was barred under Sec. 933(g), because she had failed to obtain Travelers' written consent to the settlement.¹⁴  After reviewing the factual findings of the ALJ, the Board affirmed the determination of the ALJ that the decedent was a harbor worker and not a seaman, thus entitling Bundens to $335,754¹⁵  in LHWCA benefits. The Board reasoned that the determination by the ALJ that the decedent was primarily a dockbuilder who performed construction, salvage, and repair work, was reasonable and supported by evidence in the record. The Board did not address the fact that the ALJ had erred by finding that the vessel was not "in navigation."

With respect to the Sec. 903(e) credit issue, the Board agreed with Brenneman that the company was entitled to a credit for its net payment in settlement of the federal court litigation.¹⁶  It reasoned that the settlement did not delineate how the settlement money was apportioned between the two claims. Therefore, the Board concluded that it was error for the ALJ to rely on the subsequent LHWCA proceedings to determine that the decedent was a harbor worker and then to attribute the settlement exclusively to Bundens' Sec. 905(b) claim. The Board concluded that since the record was unclear as to how the settlement amount was to be apportioned between the Jones Act and the LHWCA claim, Brenneman was entitled to offset the net amount of the settlement against its liability under the LHWCA.

The Board held in the alternative that even if Brenneman could not claim a credit under Sec. 903(e), it would still be entitled to a credit under Sec. 933(f) which provides a credit for an employer where a claimant recovers an amount in a suit against a third party for which compensation is payable under the LHWCA.¹⁷  The Board concluded that because Bundens had filed suit and recovered against third parties, Brenneman was entitled to offset the net amount of the third party recovery against its LHWCA liability.¹⁸  Thus, the Board modified the ALJ's decision to allow Brenneman a full credit for the net amount of the settlement.

The Board rejected Brenneman's defense under Sec. 933(g) (1), concluding that this subsection only applies where the amount recovered from a settlement is less than the amount of compensation due. It reasoned that Bundens received a net recovery of $646,078 from the federal court tort settlement, and would only be entitled to $335,754 under the LHWCA, an amount less than the net recovery from the one million dollar settlement. Under these circumstances, the Board ruled that Sec. 933(g) (2) applied, which required Bundens to provide Brenneman with notice of the settlement. It found that this requirement was fulfilled here since Brenneman had been a party to the settlement agreement.

We have before us the appeal by Bundens of the decision of the Board which held that Brenneman was entitled to a credit pursuant to Sec. 903(e) or Sec. 933(f) of the LHWCA as a result of the court-approved settlement of Bundens' federal court litigation. Additionally, we have the cross-appeal by Brenneman challenging: (1) the Board's decision to affirm the ALJ's finding that the decedent was a harbor worker; and (2) the Board's rejection of Brenneman's Sec. 933(g) defense.

On review of an award of benefits under the LHWCA, the factual findings of an Administrative Law Judge are binding on the Benefits Review Board if they are rational, supported by substantial evidence on the record as a whole, and consistent with applicable law. 33 U.S.C. § 921(b) (3) (1988); Elliot Coal Mining Co. v. Director, Office of Workers' Compensation Programs, 17 F.3d 616, 625-26 (3d Cir. 1994). We review the Board's decision for the limited purpose of determining whether it committed an error of law. A Board decision that sets aside findings of an ALJ that are supported by substantial evidence is legally erroneous. Elliot Coal, 17 F.3d at 626.

Initially, we note that the test for ascertaining whether an employee is a member of a crew under the LHWCA is the same as that for determining seaman status under the Jones Act. See Senko v. La Crosse Dredging Corp., 352 U.S. 370, 371, 77 S. Ct. 415, 416, 1 L. Ed. 2d 404 (1957). Thus, a conclusion that a worker is a seaman necessarily precludes recovery under the LHWCA. Conversely, a determination that a worker is not a member of a crew permits recovery under the LHWCA. See Wilander, 498 U.S. at 353, 111 S. Ct. at 817 ("We now recognize that the LHWCA is one of a pair of mutually exclusive remedial statutes that distinguish between land-based and sea-based maritime employees."). The test to determine seaman status was identified in Griffith: (1) the vessel must be in navigation; (2) the worker must have a more or less permanent connection with the vessel; and (3) the worker must be aboard primarily to aid in navigation. 521 F.2d at 36. The Supreme Court later modified this test in Wilander, holding that, "the time has come to jettison the aid in navigation language." 498 U.S. at 353, 111 S. Ct. at 816. The Court reasoned that there was no indication in either the Jones Act or the LHWCA that Congress intended to exclude traditional seamen who do not aid in navigation. 498 U.S. at 354, 111 S. Ct. at 817. Thus, the Court held in order to qualify for coverage under the Jones Act, the employee must: (1) have an "employment-related connection to a vessel in navigation"; and (2) " 'contribut [e] to the function of the vessel or to the accomplishment of its mission.' " 498 U.S. at 355, 111 S. Ct. at 817 (citing Offshore Co. v. Robison, 266 F.2d 769, 779 (5th Cir. 1959)). Stated differently, the second element does not require that "a seaman aid in navigation ... of the vessel, but a seaman must be doing the ship's work." Id.

Because Wilander was not decided until 1991, that opinion was not considered by the second ALJ until raised by Brenneman in its supplemental petition following denial upon reconsideration. Brenneman argues that even after considering Wilander, the ALJ again erred by assuming that the barge Conqueror was not a vessel in navigation despite a stipulation by the parties to the contrary. We are called upon to determine whether the Board properly affirmed the decision of the second ALJ regarding the status of the decedent as a harbor worker despite these factual and legal errors.

In the decision rendered on remand, the ALJ made findings of fact and concluded that the decedent was a harbor worker for the following reasons: (1) the decedent's duties included diving and dockbuilding; (2) the decedent's job on the date of his death was that of a wharf and dockbuilder; and (3) during the last three years of his employment, the decedent spent approximately one-third of his employment as a diver and two-thirds as a dockbuilder. In his Decision and Order Denying Supplemental Petition following reconsideration, the ALJ rejected Brenneman's argument that the decedent was a seaman by virtue of his performing the work of the barge Conqueror at the time of his death. The ALJ found that the decedent was engaged in the traditional longshore activity of repairing a dock or a pier at the time of his death, and that he was on the barge to accomplish a longshore function. The ALJ further concluded that although the decedent maintained some connection with vessels, and with the Conqueror in particular, his primary duties were related to construction work as a dockbuilder, and his diving activities did not constitute his predominant employment activities.

Although the ALJ erroneously concluded that the vessel was not in navigation, the ALJ's determination that the decedent was not a seaman was reasonable, supported by evidence in the record, and in accordance with controlling precedent. Prior to finding seaman status, Wilander mandates that the employee must have an employment-related connection to a vessel in navigation and the employee's duties must contribute to the function of the vessel or the accomplishment of its mission. The factual finding of the ALJ that the decedent was engaged in traditional longshore activity may well have persuaded him that the decedent did not have an employment-related connection with a vessel sufficient to satisfy the first prong of the Wilander test.¹⁹  Because at least one of the elements of the Wilander test was not satisfied, it was not improper for the ALJ to conclude that the decedent was a harbor worker, despite his erroneous conclusion that the vessel was not in navigation.

Additionally, despite the fact that the barge was in navigation, the Board found support for the ALJ's determination in its findings that: (1) he kept his diving equipment at home; (2) he commuted to work and received his diving assignments on shore; (3) he never ate or slept on the vessel; (4) his duties included diving and dockbuilding; (5) his job title on the date of his death was "wharf and dockbuilder;" (6) he was a member of the Wharf and Dockbuilders and Pile Drivers Union; (7) his dockbuilding duties remained the same whether he was working on land or on the barges; and (8) he spent approximately two-thirds of his time as a dockbuilder and only one-third as a diver during the last three years of his employment.²⁰  In reviewing the decision of the Board, we conclude that it did not err in upholding the finding of the ALJ that the decedent was a harbor worker by virtue of his primary duties which related to construction work as a dockbuilder.

B. Applicability of Sec. 903(e) and Sec. 933(f)

The ALJ reasoned that the only way to ascertain if the Sec. 903(e) exemption applied was to first determine if the settlement funds were paid to settle a Jones Act claim or a Sec. 905(b) negligence claim under the LHWCA. He determined that if the monies were paid to settle a Jones Act claim, then Brenneman would be entitled to statutory credit under Sec. 903(e). He further concluded that if the monies were paid to settle a LHWCA negligence claim under Sec. 905(b), then Brenneman would not be entitled to a credit under Sec. 903(e). The ALJ assumed that since it was the intention of all the parties in the settlement agreement to allow Bundens to pursue her LHWCA claim, it was clear that the payment was not a settlement of the Jones Act claim. On appeal, the Board held that when the record is unclear as to how the settlement fund is apportioned among the various claims being settled, the employer is entitled to offset the net amount against its liability under the LHWCA. Bundens argues that the wording of the Release clearly indicated that no one intended to foreclose her rights to collect benefits under the LHWCA.²¹ 

Additionally, Bundens argues that since the Sec. 903(e) credit is an affirmative defense, the burden of proof is not on her to prove that the settlement fund was allocated to the LHWCA claim, but rather it is the burden of Brenneman to show that the settlement monies were allocated to the Jones Act claim.²² 

We believe the correct approach in addressing the credit issue is the view espoused by the Director of the Office of Workers' Compensation Programs ("Director"). The Director argues that it is unnecessary to determine how the settlement funds were apportioned between the Jones Act claim and the Sec. 905(b) claim under the LHWCA because the combination of the credit and offset provisions of Sec. 903(e) and Sec. 933(f) would provide a full credit to the employer for amounts it actually paid.²³ 

Before explaining how the combined application of Sec. 903(e) and Sec. 933(f) works to provide the employer with a credit for funds already paid in the tort settlement, we must first address Bundens' contention that Sec. 933(f) does not apply in these proceedings. Bundens argues that Sec. 933(f) was never properly raised by Brenneman in the proceedings before the ALJ or the Board and thus Brenneman has waived its right to assert Sec. 933(f). Bundens thus contends it was error for the Board to raise this offset provision, sua sponte. We conclude that a Sec. 933(f) defense was raised.

Initially, we observe that Brenneman explicitly raised a Sec. 933(g) defense. Since Sec. 933(f) governs the offset of third-party settlements in the event that the requirements of Sec. 933(g) have been met, the Board's consideration of Brenneman's Sec. 933(g) (1) defense fairly included consideration of Sec. 933(f). Next, even Bundens concedes that "Sec. 933(g) (1) refers to the employer's compensation liability under 33 U.S.C. § 933(f)." Bundens' answering brief at 19. Additionally, we observe that in the settlement agreement signed by Bundens, the following language was present:

Nothing herein shall be construed as preventing the compensation carrier from defending the compensation claim on the basis that its liability is discharged because this Agreement constitutes settlement of a "third party claim", or as preventing the Releasor from contending that such defense is inapplicable.

App. at 94a. While this language has no bearing on the credit issues that were actually raised by Brenneman in the LHWCA proceedings, we observe that the "third party claim" language explicitly refers to Sec. 933(f). The combination of the fact that Brenneman actually raised Sec. 933(g) with the explicit reservation of its right to raise the Sec. 933(f) defense suffices to put Bundens on notice. We also note that the failure of Brenneman to exhaust its administrative remedies is not so troubling here because all of the findings necessary to apply Sec. 933(f) are included in the findings for either Sec. 903(e) or Sec. 933(g).

Next, Bundens argues that even if Sec. 933(f) has not been waived by Brenneman, this provision does not apply here because an employer cannot be a "third person" within the meaning of Sec. 933(f). The question before the Court is whether an employer who settles a negligence suit under Sec. 905(b), when it is acting in its capacity as a vessel owner, is considered a third person under Sec. 933(f). We believe that the only meaningful interpretation of Sec. 933(f) is to treat the employer as a third party whenever the employee recovers funds from the employer in other legal proceedings. Section 933(f), as set forth above, indicates that an employer only has to pay compensation benefits to the "person entitled to compensation" ("PETC") when the amount of the benefits to which the PETC is entitled under the LHWCA exceeds the net amount of money that the PETC has recovered from a third party. If the employer/vessel owner is a third party, then any monies paid by the employer in the negligence suit can be used to offset the monies owed the PETC under the LHWCA. If the employer/vessel owner is not considered to be a third party under Sec. 933(f), then the employer is prohibited from deducting monies already paid.

It seems clear that if an employer is able to offset his liability under the LHWCA with monies previously paid by others under a tort settlement, then there is even stronger reason to allow the employer to offset monies paid in a tort settlement when the employer is the one who previously paid the monies. Under Sec. 933(f), an employer who settles a tort suit as a vessel owner must be construed as a third party. To hold otherwise would create a perverse result: an employer would have to pay a double recovery simply because he is the owner of the vessel, whereas if another party is the owner of the vessel and the employee settles with that third party for a net sum which exceeds the amount to which he is entitled under the LHWCA, the employer would pay nothing. Thus, the net amount of $646,078 that Bundens received for settling the suit can be said to be an amount recovered against a third person and can be used by Brenneman to offset its liability under the LHWCA.

After concluding that Sec. 933(f) was properly raised and that its third person setoff provision applies to Brenneman as the employer/vessel owner, we now turn to the discussion of how Secs. 903(e) and 933(f), taken together, allow Brenneman a credit for the net amount of its tort settlement. Section Sec. 903(e) provides an employer with a credit for payments made under the Jones Act.²⁴  Section Sec. 933(f) states that an employer is required to pay under the LHWCA only the difference between its LHWCA liability and the net amount recovered by the employee in suits against third parties for damages. Whatever amount of the settlement is attributable to settlement of the Jones Act claim will be credited against Brenneman's LHWCA liability under Sec. 903(e). Whatever amount of the settlement is attributable to settlement of the Sec. 905(b) claim offsets Brenneman's liability in accordance with Sec. 933(f). Thus, no matter how the parties could have apportioned the settlement between the claims under the Jones Act and under Sec. 905(b), and no matter who bears the burden of proving apportionment,²⁵  Brenneman is entitled to a credit for the net settlement amount by virtue of the combined application of Secs. 903(e) and 933(f).²⁶ 

Notwithstanding the applicability of Secs. 903(e) and 933(f), these provisions must be applied to Barbara and Gregory, separately, since Barbara and Gregory are both "PETC" under Sec. 905(a) which lists separately "wife" and "dependents." In analyzing the tort award, we note that $1,000,000 was recovered and was to be divided 70% to Barbara and 30% to Gregory. After costs and attorneys' fees, the net amount awarded to Barbara and Gregory, respectively, was $452,255 and $193,823.

Under Sec. 933(f), the employer is to pay a sum "equal to the excess of the amount which the Secretary determines is payable on account of such injury or death over the net amount recovered against such third person." 33 U.S.C. § 933(f) (emphasis added). Likewise, to the extent that the employer does not receive a credit under Sec. 903(e), it is required to make up the deficiency. Under the LHWCA, Barbara and Gregory are entitled to $335,754--Barbara's share was $100,628 and Gregory's share was $235,126.

Thus, applying Secs. 903(e) and 933(f) together to each of these separate claims, we note that Barbara received $452,255 from her tort settlement and would be entitled to $100,628 from the LHWCA. Since her recovery under the LHWCA does not exceed her net recovery from the third party suit, she is entitled to no additional funds under the LHWCA. Gregory, on the other hand, received $193,823 from the tort settlement and is entitled to $235,126 from the LHWCA. Since his recovery under the LHWCA exceeds his net recovery from the third party suit, he is entitled to an additional $41,303 from Brenneman under the LHWCA, barring any termination of benefits under Sec. 933(g) (2).²⁷ 

Section 933(g) (1) applies to settlements with third persons where the settlement is for an amount less than the compensation to which the claimant would be entitled under the LHWCA. It requires that the employee receive the written approval of the employer and the employer's carrier whenever the employee enters into a settlement for an amount less than the compensation that he or she is entitled to under the LHWCA.

The Board rejected Brenneman's defense under Sec. 933(g) (1), concluding that this subsection only applies where the amount recovered from a settlement is less than the amount of compensation due. It reasoned that Barbara and Gregory Bundens received a net recovery of $646,078 from the federal court tort settlement, and would only be entitled to $335,754 under the LHWCA, an amount less than the net recovery from the one million dollar settlement.

The Director argues that the Board made two errors in applying Sec. 933(g). First, the Board looked to the net settlement amount instead of the gross settlement amount when deciding whether Bundens had to obtain written approval of the settlement. Second, the Board treated the tort recovery of Barbara and Gregory as one settlement. Instead, it should have considered Barbara and Gregory separately since both are "persons entitled to compensation" under the LHWCA.

Comparing the language of Sec. 933(f) to Sec. 933(g), we observe that whereas Sec. 933(f) specifically refers to the "net amount recovered against such third person" (and even defines it), Sec. 933(g) refers simply to "a settlement ... for an amount less than the compensation to which the person ... would be entitled." Thus, although Congress demonstrated its ability to specify "net amount" when it wanted to, it failed to do so in subsection (g). " [W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Immigration and Naturalization Service v. Cardoza Fonseca, 480 U.S. 421, 432, 107 S. Ct. 1207, 1213, 94 L. Ed. 2d 434 (1987) (citations omitted). Moreover, as the Supreme Court has stated, where "the plain meaning of th [e] statute appears to settle the question," a court should look to other sources "to determine only whether there is 'clearly expressed legislative intention' contrary to the language, which would require [the court] to question the strong presumption that Congress expresses its intent through the language it chooses." Id. at 432 n. 12, 107 S. Ct. at 1213, n. 12.

Additionally, the inclusion of "net" and its definition in Sec. 933(f) was part of a comprehensive 1984 overhaul of Sec. 933. During this revision, Congress rewrote four subsections, including Sec. 933(g). Although Sec. 933(g) was elaborately recast, Congress did not elect to include the "net" language that it carefully placed in Sec. 933(f).

Given the opportunity to redraft the statute, we might well have included the "net" language in Sec. 933(g).²⁸  However, because our task is to interpret, and not to create law, we are compelled to conclude that in applying Sec. 933(g) the Board should consider the gross, and not the net, settlement funds.²⁹ 

Applying Sec. 933(g) (2) separately to Barbara and Gregory, we reach the following. Because the $700,000³⁰  gross settlement that Barbara received in the settlement exceeds the $100,628 that she would be entitled to under the LHWCA, she was not required under Sec. 933(g) (1) to obtain the written approval of either the employer or the employer's carrier prior to the settlement. And since the $300,000 that Gregory received was more than the $235,126 that he would be entitled to under the LHWCA, he too was not required to obtain the written approval of the employer or the employer's compensation carrier.

Although written approval was not required under Sec. 933(g) (1), the Board ruled that the Sec. 933(g) (2) notice provision applied. The Board found that this requirement was fulfilled here since Brenneman had been a party to the settlement agreement. We agree. Section 933(g) (2) requires that the employer receive notification of the third party settlement. Because Brenneman itself was a party to the third party settlement, the Sec. 933(g) (2) notification requirement was clearly satisfied in this case.³¹  See also Bethlehem Steel Corp. v. Mobley, 920 F.2d 558, 561 (9th Cir. 1990) ("So long as the employer has notice of the settlement before it has made any payments and before the Agency orders it to make any payments, the purposes of [Sec. 933(g) (2) ] are satisfied.").

Although the Board erred in interpreting Sec. 933(g) (1), it reached the correct result in deciding that Sec. 933(g) (1) did not apply. Additionally, the Board did not err in holding that the notice provision of Sec. 933(g) (2) was satisfied. Thus, we will affirm the order of the Board on this issue.

CONCLUSION

We will affirm the decision of the Board that: (1) the decedent was a harbor worker, not a seaman; (2) the "written approval" requirement of Sec. 933(g) (1) does not apply, though we affirm on other grounds; and (3) the notice provision of Sec. 933(g) (2) was satisfied by virtue of the employer's participation in the tort settlement. We will reverse the order of the Board that Sec. 903(e) alone, or alternatively Sec. 933(f) alone, provides a credit for the employer. We hold that only when Sec. 903(e) and Sec. 933(f) are combined does an employer receive a credit when the apportionment of funds between prior settled claims is unknown. In sum, because the Board erred in applying and interpreting various provisions of the LHWCA, we will remand this matter to the Board to re-calculate the compensation benefits owed to Gregory.