Calvi v. Gallagher Bassett Services Inc.

No. 115 February 19, 2026 281

IN THE COURT OF APPEALS OF THE

STATE OF OREGON

In the Matter of the Compensation of

John Calvi, Claimant.

John CALVI,

Petitioner,

v.

GALLAGHER BASSETT SERVICES INC.

and Progressive Roofing - Services,

Respondents.

Workers’ Compensation Board

2303605; A186103

Argued and submitted November 10, 2025.

Nathan R. Goin argued the cause and filed the briefs for

petitioner.

Rebecca Watkins argued the cause for respondents. Also

on the brief was SBH Legal.

Before Tookey, Presiding Judge, Kamins, Judge, and

Jacquot, Judge.

JACQUOT, J.

Affirmed.

282 Calvi v. Gallagher Bassett Services Inc.

JACQUOT, J.

Claimant seeks judicial review of an order of the

Workers’ Compensation Board (board), which adopted and

affirmed the administrative law judge’s (ALJ) determina-

tion that a penalty for unreasonable claim closure cannot

be assessed under ORS 656.268(5)(f) unless the claimant

has filed a request for hearing to contest an order on recon-

sideration. Claimant asks us to reverse the board’s order

and determine that ORS 656.268(5)(f) does not procedurally

mandate the filing of a request for hearing from an order on

reconsideration in order to place the correctness of a closure

at issue for the purposes of obtaining a penalty for unrea-

sonable closure proceedings. Claimant’s argument presents

a question of statutory construction that we review for legal

error. Hopkins v. SAIF, 349 Or 348, 355, 245 P3d 90 (2010)

(“[T]he meaning of a statutory term is a matter of law[.]”);

ORS 183.482(8)(a).1 In reviewing the board’s order, we con-

clude that the board did not err and therefore affirm.

Claimant injured his right ankle at work. The board

accepted a claim for a disabling right ankle sprain and right

talar chondral lesion, and the claim processed to closure on

May 25, 2023. On that same date, claimant filed a request

for reconsideration. The Appellate Review Unit (ARU) of the

Workers’ Compensation Division issued an order on recon-

sideration rescinding the notice of closure as premature.2

Claimant did not request a hearing from the recon-

sideration order, which became final. But claimant filed a

request for hearing seeking a penalty and attorney fees to

be assessed under ORS 656.268(5)(f), asserting that employ-

er’s notice of closure had been unreasonable.

1

ORS 183.482(8)(a) states, in relevant part:

“If the court finds that the agency has erroneously interpreted a provi-

sion of law and that a correct interpretation compels a particular action, the

court shall:

“(A) Set aside or modify the order; or

“(B) Remand the case to the agency for further action under a correct

interpretation of the provision of law.”

2

The closure was rescinded because the insurer failed to obtain sufficient

medical support before processing the closure and instead relied on a series of

contradictory reports concerning claimant’s impairment findings, medically sta-

tionary date, and work restrictions.

Cite as 347 Or App 281 (2026) 283

ORS 656.268(5)(f) provides:

“If an insurer or self-insured employer has closed a

claim or refused to close a claim pursuant to this section, if

the correctness of that notice of closure or refusal to close is

at issue in a hearing on the claim and if a finding is made

at the hearing that the notice of closure or refusal to close

was not reasonable, a penalty shall be assessed against the

insurer or self-insured employer and paid to the worker in

an amount equal to 25 percent of all compensation deter-

mined to be then due the claimant.”

(Emphasis added.) In Cayton v. Safelite Glass Corp., 232

Or App 454, 460, 222 P3d 1134 (2009), we stated that the

plain text of ORS 656.268(5)(f) provides three predicates to

the assessment of a penalty: (1) the closure of a claim or a

refusal to close the claim; (2) a hearing at which the “cor-

rectness” of that action is at issue; and (3) a finding that the

notice of closure or the refusal to close was not reasonable. In

applying those predicates, the board has held that, to place

the correctness of a notice of closure at issue at a hearing,

a party must request a hearing from the reconsideration

order. Warren D. Duffour, 70 Van Natta 176, 178-79 (2018)

(Duffour II) (irrespective of a favorable result on reconsider-

ation, a worker seeking a penalty under ORS 656.268(5)(f)

must challenge the favorable determination in order to place

the correctness of the notice of closure at issue at a hearing)3

Citing the board’s order in Duffour II, the ALJ here declined

to reach the merits of claimant’s request for a penalty,

3

In our judicial review of Warren D. Duffour, 65 Van Natta 1744 (2013)

(Duffour I), we explicitly did not address the issue presented here: whether, or

under what circumstances, a request for hearing from an order on reconsider-

ation would place the correctness of a notice of closure at issue for purposes of a

penalty under ORS 656.268(5)(f). Duffour v. Portland Community College, 283 Or

App 680, 688, 688 n 7, 389 P3d 1162 (2017). We expressed

“no opinion on whether claimant will be able to establish entitlement to

the penalty and fees that he seeks under the terms of ORS 656.268(5)(d) or

656.382(1). In particular, we express no opinion as to whether and in what

circumstances a hearing to consider penalty and fee requests stemming from

an incorrect notice of closure is one in which ‘the correctness of that notice

of closure * * * is at issue in a hearing on the claim’ for purposes of ORS

656.268(5)(f).”

Id. at 688 n 7.

Relevant to the Duffour cases, ORS 656.268(5)(f) was previously numbered

ORS 656.268(5)(d) and was renumbered in 2015. Or Laws 2015, ch 144, § 1. The

text of that subsection has not changed in the intervening years.

284 Calvi v. Gallagher Bassett Services Inc.

explaining that claimant had failed to place the correctness

of the notice of closure at issue in a hearing by requesting a

hearing from the favorable reconsideration order.

On appeal, the board adopted and affirmed the ALJ’s

order. Board Member Ousey concurred, expressing the con-

cern that, although the board’s disposition was required by

board precedent and by ORS 656.268(5)(f), the requirements

of ORS 656.268(5)(f) “create an unnecessarily cumbersome

process for requesting a penalty for an incorrect closure that

is not consistent with the legislature’s purpose in enacting

the statute.” 76 Van Natta 687, 687 (2024) (Ousey, Member,

concurring).

Claimant seeks judicial review, contending that the

board incorrectly determined that, to put the notice of clo-

sure at issue in a hearing, a claimant must file a request

for a hearing challenging an order on reconsideration, even

when the order is favorable to claimant. Rather, claimant

contends, a claimant may place the correctness of a notice

of closure at issue by simply requesting a hearing, but not

necessarily from a favorable order on reconsideration. An

ALJ (and the board), claimant contends, can determine the

reasonableness of the claim closure for purposes of a pen-

alty under ORS 656.268(5)(f) without a direct appeal from a

favorable order on reconsideration.

Claimant’s arguments on judicial review present

a question of statutory construction that we address under

the template of State v. Gaines, 346 Or 160, 171-72, 206 P3d

1042 (2009), considering first the statutory text in context.

For reasons slightly different from those on which the ALJ

and the board relied, we explain why we disagree with

claimant’s construction of ORS 656.268(5)(f).

Focusing on the text of the relevant statutes, Oregon

law requires that workers’ compensation disability claims be

processed to closure by a notice of closure. ORS 656.268(5).

The notice of closure informs the worker of permanent

impairment, the duration of disability benefits, and the date

that aggravation rights will expire. ORS 656.268(5)(c).

If the claimant is not satisfied with the notice of clo-

sure and seeks to challenge it, the claimant must request

Cite as 347 Or App 281 (2026) 285

reconsideration with the ARU. ORS 656.268(5)(e) (providing

in part, “[i]f a worker, a worker’s beneficiary, an insurer or

a self-insured employer objects to the notice of closure, the

objecting party first must request reconsideration by the

director under this section”). The ARU then issues an order

on reconsideration that either affirms, modifies, or rescinds

the insurer’s notice of closure. The ARU thus makes the first

determination as to the correctness of the notice of closure.

But the ARU does not have authority to award a

penalty for an incorrect notice of closure that was unrea-

sonable; that authority lies with the board under ORS

656.268(5)(f). See, e.g., Precision Castparts Corp - PCC

Structurals v. Cramer, 320 Or App 324, 328, 514 P3d 514

(2022) (board affirming an ALJ’s penalty assessment pursu-

ant to ORS 656.268(5)(f)). As noted above, ORS 656.268(5)(f)

provides for such a penalty only if the correctness of the

notice of closure is “at issue” in a hearing, and a finding is

made that the notice of closure was unreasonable. Cayton,

232 Or App at 460. It is true, as claimant contends, that an

ALJ determines, independent of the ARU’s determination,

whether the notice of closure was unreasonable. But ORS

656.268(5)(f) does not only require a determination of rea-

sonableness; the correctness of the notice of closure must also

be “at issue” before the ALJ. A matter is “at issue” if it is

“presented for determination.” 4 The statutes do not state so

explicitly, but when the ARU has issued an order relating to

the correctness of the notice of closure, in order to place the

correctness of the notice of closure at issue in the hearing,

a party must challenge the ARU’s determination. When the

ARU’s order is favorable to the claimant, the statute places

on a claimant who seeks a penalty the unusual requirement

to challenge the favorable order.

4

To determine a word’s meaning, we often consult dictionaries contempora-

neous with the enactment of the statutory provision we are analyzing. See e.g.,

Comcast Corp. v. Dept. of Rev., 356 Or 282, 296 n 7, 337 P3d 768 (2014).

As relevant here, Merriam-Webster’s New International Dictionary 1319

(2nd ed 1961) (defining “issue” as: “In pleading, a single material point of law or

fact depending in the suit, which, being affirmed on the one side and denied on

the other, is presented for determination.”). The phrase “at issue” is defined as

“[w]henever the parties come to a point in the pleadings which is affirmed on

one side and denied on the other, they are said to be at an issue.” Black’s Law

Dictionary 159 (4th ed 1951).

286 Calvi v. Gallagher Bassett Services Inc.

According to claimant, the penalty provided by ORS

656.268(5)(f) predates the adoption of the reconsideration

process, when the board’s hearings division made the initial

determination as to the correctness of a notice of closure.

But the legislature did not amend ORS 656.268 to allow the

ARU to assess a penalty or to reflect, as claimant would con-

strue it, that the penalty is available at a hearing even if the

correctness of the notice of closure is not at issue before the

ALJ.5 We will not assume that the legislature’s failure to do

so was an oversight. See ORS 174.010 (“In the construction

of a statute, the office of the judge is simply to ascertain and

declare what is, in terms or in substance, contained therein,

not to insert what has been omitted, or to omit what has been

inserted * * *.”). Even when the ARU has made a determina-

tion favorable to the claimant as to the correctness of a notice

of closure, the statute’s unambiguous text requires that, in

order to be entitled to a penalty, the claimant must place the

correctness of the notice of closure at issue. Here, claimant

did not challenge the ARU’s determination that the claim

was prematurely closed. Thus, he did not place the correct-

ness of the notice of closure at issue at the hearing. For that

reason, the board did not err in concluding that there is no

basis for assessment of a penalty under ORS 656.268(5)(f).

Affirmed.

5

As concurring Board Member Ousey explained, the legislature amended

the subsection that is now ORS 656.268(5)(f) in 1979 and 1987, to “allow the

assessment of a penalty for an unreasonable closure.” John Calvi, 76 Van Natta at

688. Then, as explained by the board, in 1990, the legislature amended the stat-

ute and “created the mandatory reconsideration process for challenging a Notice

of Closure.” Id. (citing Or Laws 1990, ch 2, § 16(3)). In the 1990 amendments,

ORS 656.268 “was not amended to allow the Director to also assess a penalty

for an unreasonable closure during the reconsideration process.” Id. (emphasis

added). Rather, the statute continued to require that “a penalty could be awarded

only if the correctness of a Notice of Closure was at issue and a finding of unrea-

sonableness was made in a hearing.” Id. at 688-89 (emphasis in original). And,

“[b]ecause the reconsideration process does not constitute a hearing, the statu-

tory requirements for a penalty award cannot be met at the time of the reconsid-

eration proceeding.” Id. at 689.

The concurrence stated:

“Because the purpose of the ORS 656.263(5)(f) penalty provision was to allow

claimants to seek penalties for unreasonable closures and deter carriers

from abusing the closure process, I find that the additional burden placed

on claimants seeking such a penalty frustrates the purpose of the statute.”

Id. The concurrence reasoned, in essence, that the required construction of the

statute frustrates the legislative intent.