author: WILLIAM B. CAIN, J.,

text:
    Gary MOSLEY v. TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE.
    Court of Appeals of Tennessee, at Nashville.
    Aug. 6, 2004 Session.
    Nov. 22, 2004.
    Permission to Appeal Denied by Supreme Court May 9, 2005.

      Paul G. Summers, Attorney General & Reporter; Michael E. Moore, Solicitor General, and Sarah Ann Hiestand, Senior Counsel, Financial Division, Office of the Attorney General, for the appellant, Tennessee Department of Commerce and Insurance.
    Ernest W. Williams, Anna Elizabeth Freeman, and D. Scott Porch, IV, Frank-' lin, Tennessee, for the appellee, Gary Mosley.
   OPINION

WILLIAM B. CAIN, J.,

delivered the opinion of the court,

in which WILLIAM C. KOCH, JR., P.J., M.S., and FRANK G. CLEMENT, JR., J., joined.

This appeal involves a decision by the Tennessee Department of Commerce and Insurance to revoke the license of an insurance agent after finding that he had repeatedly sold insurance policies in states where he was not licensed. The agent filed a petition for review in the Chancery Court for Davidson County arguing that the licensing statute was unconstitutionally vague and that the record did not support the Department’s decision. The trial court found that the record supported the Dé-partment’s conclusion that the agent had sold policies in states where he was not licensed but determined that the agent’s license should be suspended for six months rather than revoked. The Department appealed to this court. We reverse the judgment and reinstate the Department’s revocation order.

Gary Mosley, at the time of the events involved in this case, was a licensed insurance agent with more than twenty-five years experience. He was licensed to sell insurance in Tennessee, Kentucky, Mississippi, and Indiana; however, he was not licensed to sell insurance in the states of Virginia and Georgia. As far as this record shows, Mr. Mosley had no record of prior administrative discipline problems or any other activities that would reflect adversely upon him in. his profession.

The Administrative Law Judge (ALJ) made extensive findings of fact and conclusions of law in an initial Order filed March 15, 2002 following a hearing on October 16, 2001. No application, pursuant to Tennessee Code Annotated section 4-5-315, for a review of the initial Order by the agency was filed, and, by Order of April 2, 2002, the initial Order became the Final Order pursuant to Tennessee Code Annotated section 4-5-318(0(3). The Order of the ALJ revoked Mr. Mosley’s insurance license and assessed penalties in the amount of $25,000 against him.

Mosley filed a Petition for Judicial Review pursuant to Tennessee Code Annotated section 4-5-322, which was heard before the Chancery Court of Davidson County on September 20, 2002 on the briefs of the parties, the administrative record, and the statements of counsel. The court, on May 7, 2003, entered its Memorandum and Order finding no fault with the facts as determined by the ALJ but reducing the penalties imposed by the Administrative Tribunal stating:

The Court concludes that the Petitioner’s license should be temporarily suspended for a period of six (6) months from the date of the ALJ’s order, and that his license should then be activated at the conclusion of the six months. Further, the Petitioner should be and is hereby assessed a fíne in an amount which represents the total commissions he earned on the aforementioned policies.

The facts as found by the AL J are in all essential respects conceded by Mosley to be true. These findings are:

1. The Tennessee Insurance Law, as amended, Tennessee Code Annotated Title 56 (hereinafter referred to as the “Law”) places the responsibility for the administration of the Law on the Commissioner of Commerce and Insurance (hereinafter referred to as the “Commissioner”). TenmCode Ann. §§ 56-1-202, 56-6-155. The Division is the lawful agent through which the Commissioner discharges this responsibility.
2. Gary C. Mosley (hereinafter referred to as “Mosley”), is a citizen of the State of Tennessee, residing at 817 Preston Road, Antioch, Tennessee. Mosley, at all times relevant to the events herein, has been licensed by the Commissioner to sell insurance in this state as an insurance agent. Mr. Mosley has held an insurance agent’s license since 1976. He is licensed to sell insurance in Kentucky, Mississippi, and Indiana as well. Mr. Mosley does not have and has never held insurance licenses in Georgia or Virginia.
8.On or around November 27, 1995, Mosley went to the house of Betty S. Edmondson (hereinafter referred to as “B. Edmondson”), located in Rossville, Georgia. While at B. Edmondson’s home, Mosley sold B. Edmondson a replacement life insurance policy issued by Pyramid Life Insurance Company (hereinafter referred to as “Pyramid”).
4. On the Application for Life Insurance, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by B. Edmondson in Chattanooga, Tennessee. B. Edmondson actually signed the application in Rossville, Georgia.
5. As of the date of the hearing, Mosley has received commissions from the sale of this policy to B. Edmondson in the amount of Four Hundred Eight Dollars and eighty cents ($408.80).
6. Mosley testified at the hearing that he placed “Chattanooga, Tennessee” in the signed at box because he was in a suburb of Tennessee, albeit one in the State of Georgia, and that B. Edmondson had previously purchased a Pyramid insurance policy by someone out of Pyramid’s Chattanooga office.
7. While at B. Edmondson’s home in Rossville, Georgia, Mosley also sold B. Edmondson a Medicare Supplement policy issued by Pyramid. This was not an exchange or replacement policy.
8. On the Application for Medicare Supplement Policy, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by B. Edmondson in Chattanooga, Tennessee. B. Edmondson actually signed the application in Rossville, Georgia.
9. As of the date of the hearing, Mosley has received commissions from the sale of this policy to B. Edmondson in the amount of Six Hundred Fourteen Dollars and forty-two cents ($614.42).
10. On or around November 27, 1995, Mosley went to the house of Eddie E. Edmondson (hereinafter referred to as “E. Edmondson”), located in Ross-ville, Georgia. While at the home of E. Edmondson, Mosley sold E. Edmondson a replacement life insurance policy issued by Pyramid.
11. On the Application for Life Insurance, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by E. Edmondson In Chattanooga, Tennessee. E. Edmondson actually signed the application in Rossville, Georgia.
12. As of the date of the hearing, Mosley has received commissions from the sale of this policy to E. Edmondson in the amount of Five Hundred Forty-Six Dollars ($546.00).
13. Mosley testified at the hearing that he placed “Chattanooga, Tennessee” in the signed at box because E. Edmondson had previously purchased a Pyramid insurance policy by someone out of Pyramid’s Chattanooga office, and was, in Mosley’s words, a “Chattanooga policyholder.[”] Mosley testified that he read this portion of the application before he signed it, and that he incorrectly filled out the “Signed At” box anyway. Mosley also testified that he knew at the time that he sold E. Edmondson this policy that E. Edmondson had to be in Tennessee for Mosley to lawfully sell him this policy.
14. While at E. Edmondson’s home in Rossville, Georgia, Mosley also sold E. Edmondson a Medicare Supplement policy issued by Pyramid. This policy did not replace or exchange any policy issued by Pyramid.
15. On the Application for Medicare Supplement, which was filled out by Mosley. Mosley noted in the appropriate box that the application was signed by E. Edmondson in Chattanooga, Tennessee. E. Edmondson actually signed the application in Rossville, Georgia.
16. As of the date of the hearing, Mosley has received commissions from the sale of this policy to E. Edmondson in the amount of Six Hundred Fifty Dollars and thirty cents ($650.30).
17. Mosley testified at the hearing that he placed “Chattanooga, Tennessee” in the signed at box because E. Edmondson had previously purchased a Pyramid insurance policy by someone out of Pyramid’s Chattanooga office, and was, in Mosley’s words, a “Chattanooga policyholder.” Mosley testified that he read this portion of the application before he signed it, and that he incorrectly filled out the “Signed At” box anyway. Mosley also testified that he knew at the time that he sold E. Edmondson this policy that E. Edmondson had to be in Tennessee for Mosley to lawfully sell him this policy.
18. On or around November 27, 1997, Mosley went to the house of Faye T. Stephens (hereinafter referred to as “Stephens”), located in Rossville, Georgia. While at Stephens’ home, Mosley sold Stephens a replacement life insurance policy issued by Pyramid.
19. On the Application for Life Insurance, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by Stephens in Chattanooga, Tennessee. Stephens actually signed the application in Rossville, Georgia.
20. Mosley testified at the hearing that he was aware that Stephens had to be in the State of Tennessee in order to legally sell her this policy. In fact, Mosley testified that he told Stephens that technically he could not write this policy for her unless she was located in the State of Tennessee, however, he wrote it anyway.
21. As of the date of the hearing, Mosley has received commissions from the sale of this policy to Stephens in the amount of Five Hundred Forty-One Dollars and twenty-seven cents ($541.27).
22. On or around February 20, 1997, Mosley went to the house of Richard R. Mabe (hereinafter referred to as “R. Mabe”), located in Ringgold, Georgia. While at R. Mabe’s home, Mosley sold R. Mabe a replacement life insurance police issued by Pyramid.
23. On the Application for Life Insurance, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by R. Mabe in Chattanooga, Tennessee. R. Mabe actually signed the application in Ringgold, Georgia.
24. Mosley testified at the hearing that he placed “Chattanooga, Tennessee” in the signed at box because R. Mabe was originally from Tennessee, and that part of the solicitation and sale occurred at R. Mabe’s place of business in Chattanooga, Tennessee. Mosley also testified, however, that part of the sale took place in Ringgold, Georgia, as well.
25. As of the date of the hearing, Mosley has received commissions from the sale of this policy to R. Mabe in the amount of Six Hundred Fifty-Two Dollars and seventy-six cents ($652.76).
26. On or around April 2, 1997, Mosley went to the house of R. Mabe, located in Ringgold, Georgia. While at R. Mabe’s home, Mosley attempted to sell R. Mabe’s daughter, April J. Mabe (hereinafter referred to as “A. Mabe”), a life insurance policy issued by Pyramid.
27. On the Application for Life Insurance, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by A. Mabe in Chattanooga, Tennessee. A. Mabe actually signed the application in Ringgold, Georgia.
28. Mosley testified at the hearing that he placed “Chattanooga, Tennessee” in the signed at box because A. Mabe was working in Tennessee, and that part of the solicitation and sale occurred at A. Mabe’s place of business in Chattanooga, Tennessee. Mosley also testified, however, that at the time he completed this application for A. Mabe he knew that she was residing in Georgia, and that the application was being filled out in Georgia.
29. On or around February 20, 1997, Mosley went to the house of B. Alvin Morgan (hereinafter referred to as “Morgan”) located in Chickamauga, Georgia. While at Morgan’s home, Mosley sold Morgan a Medicare Supplement Policy issued by Pyramid.
30. On the Application for Medicare Supplement Policy, which was filled out by Mosley. Mosley noted in the appropriate box that the application was signed by Morgan in Chattanooga, Tennessee. Morgan actually signed the application in Chickamauga, Georgia.
31. At the hearing, Mosley failed to say why he placed “Chattanooga, Tennessee” in the signed at box. Mosley did state that neither he nor Pyramid had any existing relationship with Morgan, as opposed to some of the other policyholders referenced herein.
32. As of the date of the hearing, Mosley has received commissions from the sale of this policy to Morgan in the amount of Five Hundred Forty-One Dollars and twenty-seven cents ($541.27).
33. On or around April 18, 1997, Mosley again went to Morgan’s home in Chickamauga, Georgia. While at Morgan’s home, Mosley sold Morgan a Long Term Care Policy issued by Pyramid.
34. On the Application for Home Health Care or Long Term Care Coverage, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by Morgan in Chattanooga, Tennessee. Morgan actually signed the application in Chickamauga, Georgia. Mosley testified at the hearing that he knew that Morgan had to come to Tennessee in order to lawfully sell Morgan this policy, but that he placed “Chattanooga, Tennessee” in the signed at box in order to keep Morgan from having to drive to Tennessee from his home in Georgia.
35. As of the date of the hearing, Mosley has received commissions from the sale of this policy to Morgan in the amount of Two Thousand Nine Hundred Sixty-Two Dollars and eighteen cents ($2,962.18).
36. On or around April 2, 1997, Mosley went to the house of Morgan located in Chickamauga, Georgia. "While at Morgan’s home, Mosley sold Leola A. Dunbar (hereinafter referred to as “Dunbar”) a replacement life insurance policy issued by Pyramid.
37. On the Application for Medicare Supplement Policy, which was filled out by Mosley. Mosley noted in the appropriate box that the application was signed by Dunbar in Chattanooga, Tennessee. Dunbar actually signed the application in Chickamauga, Georgia.
38. Mosley testified at the hearing that he was aware that Dunbar was living in the State of Georgia with her daughter and son-in-law when he sold her this policy in Chickamauga, Georgia. Mosley testified that he placed “Chattanooga, Tennessee” in the signed at box in order to prevent the need for Dunbar to travel to Tennessee to lawfully enter into this contract of insurance. As of the date of the hearing, Mosley has received commissions from the sale of this policy to Dunbar in the amount of One Thousand One Hundred Ninety Dollars and sixteen cents ($1,190.16).
39. On or around December 16,1997, Mosley went to the house of Dallas C. Compton (hereinafter referred to as “Compton”), located in Cave City, Virginia. While at Compton’s home, Mosley sold Compton a Medicare Supplement Policy issued by Pyramid.
40. On the Application for Medicare Supplement Policy, which was filled out by Mosley, Mosley noted in the appropriate box that the application was signed by Compton in Kingsport, Tennessee. Compton actually signed the application in Cave City, Virginia.
41. Mosley testified at the hearing that he was aware that Compton had to be in the State of Tennessee in order to legally sell him this policy.
42. As of the date of the hearing, Mosley has received commissions from the sale of this policy to Compton in the amount of Five Hundred Fifty-Seven Dollars and ninety-six cents ($557.96).
43. On or around December 16,1997, Mosley went to the house of George and Allie Carter (hereinafter collectively referred to as the “Carters”), located in Gate City, Virginia. While at the Carters’ home, Mosley sold the Carters a replacement Medicare Supplement Policy issued by Pyramid.
44. On the Application for Medicare Supplement Policy, which was filled out by Mosley. Mosley noted in the appropriate box that the application was signed by the Carters in Kingsport, Tennessee. The Carters actually signed the application in Gate City, Virginia.
45. Mosley testified at the hearing that he was aware that the Carters had to be in the State of Tennessee when he sold them this policy.
46. As of the date of the hearing, Mosley has received commissions from the sale of this policy to the Carters in the amount of Seven Hundred Ninety Dollars and seven cents ($790.07).
47. Mosley has never been licensed as an insurance agent in the State of Georgia or the Commonwealth of Virginia.
48. Pyramid’s Agent Underwriting and Administration Manual stated that “The agent must be properly contracted and appointed to solicit for the Company and properly licensed in the state of solicitation.” The Respondent admitted that he had read this document. Tr., at 55.
49. Glenn Parker, Pyramid’s Senior Vice-President of Sales and the Respondent’s supervisor, testified that Pyramid requires its agents to be licensed in the state where the application is taken or the business is transacted. Parker defined “where the application is taken” as the place where the agent meets the perspective insured, completes the necessary forms and obtains the necessary signatures. Parker also testified that it is Pyramid’s position that a person may not go into another state to obtain a signature for an application for insurance, if that agent does not have a license in the state to where he/she is going.
50. Parker testified that if the Respondent had placed the proper state on the applications discussed above, Pyramid would have returned to the perspective insured both the premium and the application. Parker further testified that the Respondent would not have received a commission from Pyramid had he properly disclosed the state in which the above policies were written.
51. Parker testified that those policies that were sold through a 1035 Exchange were actually replacement policies which replaced policies which the insured already had in force. Parker testified that, from Pyramid’s perspective, the sale of these replacement policies by the Respondent did not have any effect on the licensure requirements stated above.
52. Parker testified that, in his opinion, that he knew the Respondent to be truthful. Parker also testified, however, that should the facts alleged by the Division be true, it would affect his opinion as to whether he felt the Respondent is truthful.
53. The Respondent conceded the substance of the preceding facts. In his defense, he asserted that he was sent by his superiors at Pyramid to call on those of the above-named individuals who were former or existing clients of the Respondent and Pyramid and who formerly received services from Pyramid out of the Chattanooga or Knoxville Pyramid offices. He stated that he met with the individuals outside of Tennessee as an accommodation to each individual on account of the individual’s infirmity, convenience or otherwise. At the time of the hearing, Pyramid had paid the Respondent a total of $9,161.71 in commission on the transactions at issue here.
54. The Respondent objected that the State did not introduce evidence of the laws of Virginia or Georgia. He noted that none of the policyholders who testified had complaints against him, and most of the applications at issue were executed by persons already Pyramid policyholders and many of the applications were exchanges of one pyramid policy for another.

In her conclusions of law based upon these extensive findings of fact, the Administrative Law Judge held that the State had met its burden of proof by a preponderance of the evidence that the conduct of Mosley warranted revocation of his license. In summary the ALJ held:

Mosley left no doubt that he was aware he was supposed to be conducting business within the state borders of Tennessee, and that he was knowingly falsifying the insureds’ application records by recording the place of the transaction as in Tennessee when it was not so. In so doing, he intentionally acted in a manner that violated the insurance laws of the states of Tennessee, Georgia and Virginia and the requirements of his company, Pyramid. His conduct was fraudulent, dishonest, incompetent, untrustworthy and financially irresponsible in that the insureds could have lost the coverage they believed they had.

In this proceeding under the Uniform Administrative Procedures Act, Tennessee Code Annotated §§ 4-5-101 to 4-5-325, this Court’s review of the facts is limited to a determination of whether or not there is substantial and material evidence in the record to support the decision of the administrative agency. See Goldsmith v. Roberts, 622 S.W.2d 438 (Tenn.Ct.App.1981).

Trial and appellate standards of review are set forth in Gluck v. Civil Service Commission, 15 S.W.3d 486 (Tenn.Ct.App.1999) wherein it is held:

The chancellor’s review of the Commission’s decision is governed by T.C.A. § 4-5-322(h) (1998), which sets forth the standard of review on appeal of administrative proceedings as follows:
(h) The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if the rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or
(5) Unsupported by evidence which is both substantial and material in the light of the entire record.
In determining the substantiality of evidence, the court shall take into account whatever in the record fairly detracts from its weight, but the court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact.
The scope of review in this Court is the same as in the trial court, to review findings of fact of the administrative agency upon the standard of substantial and material evidence. DePriest v. Puett, 669 S.W.2d 669 (Tenn.Ct.App.1984). Although what amounts to “substantial and material” evidence provided for in T.C.A. § 4-5-322(h) is not clearly defined. It is generally understood that “it requires something less than a preponderance of the evidence, (citations omitted) but more than a scintilla or glimmer.” Wayne County v. Tennessee Solid Waste Disposal Control Bd., 756 S.W.2d 274, 280 (1988).
While this Court may consider evidence in the record that detracts from its weight, the court is not allowed to substitute its judgment for that of the agency concerning the weight of the evidence. T.C.A. § 4—5—322(h), Pace v. Garbage Disposal Dist., 54 Tenn.App. 263, 266, 390 S.W.2d 461, 463 (1965). The evidence before the tribunal must be such relevant evidence as a reasonable mind might accept as adequate to support a rational conclusion and such as to furnish a reasonably sound basis for the action under consideration. Pace, 54 Tenn.App. at 267, 390 S.W.2d at 463.

Gluck, 15 S.W.3d at 489-90.

While the extensive recitation of the findings of fact made by the Administrative Law Judge is not necessary to our decision under this limited standard of review, we recognize that by this decision we are reversing the decision of the chancellor and reinstating the administrative tribunal’s imposition of the ultimate sanction, the revocation of the license of an insurance agent with a 28 year previously unblemished record. Since the chancellor found, and indeed Mr. Mosley conceded, that the facts as found by the ALJ were essentially true, the case narrows down to the propriety of the sanctions imposed on Mr. Mosley by the administrative tribunal. The chancellor felt that the sanctions were too drastic and reduced the judgment of the administrative tribunal to a six month suspension and a fine limited to the actual amount of the commissions paid to Mr. Mosley for the sales of the policies in issue in the case. The State appeals the chancery court’s reduction of the sanctions.

Mr. Mosley asserts that Tennessee Code Annotated section 56-6-155 is unconstitutional as being vague and indefinite because it does not clearly define the terms “fraudulent,” “dishonest,” and “demonstratively incompetent.” This contention is without merit: “The basic concept behind the vagueness doctrine is the idea of fairness, and that the statute should be sufficiently specific to provide notice of the type of conduct expected. The doctrine should not be used to create a constitutional dilemma out of the practical difficulties in drawing statutes.” State v. Strickland, 532 S.W.2d 912, 921 (Tenn.1975).

For a legislative body to attempt to define every word used in a statute, particularly such words as “dishonest” and “fraudulent,” which, as used in almost any non-criminal context, have a well understood meaning, is too much to expect.

There is a presumption of the constitutionality of a statute. A non-criminal statute is not unconstitutionally vague where the statute is set out in terms that an ordinary person exercising ordinary common sense can sufficiently understand and comply. United States Civil Service Commission v. National Association of Letter Carriers, 413 U.S. 548, 93 S.Ct. 2880, 37 L.Ed.2d 796 (1973). See also, Broadrick, v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973); Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15, reh. denied 417 U.S. 977, 94 S.Ct. 3187, 41 L.Ed.2d 1148 (1974).

Big Fork Mining Co. v. Tenn. Water Quality Control Bd., 620 S.W.2d 515, 519 (Tenn.App.1981). The Supreme Court of Illinois made short work of such a contention in Patchett v. Baylor, 62 Ill.2d 426, 343 N.E.2d 484 (1976).

Citing Jackson Mobilphone Co., Inc. v. Tennessee Public Service Commission, 876 S.W.2d 106 (Tenn.Ct.App.1993), Mr. Mosley asserts that the action of the administrative tribunal was “arbitrary or capricious”. In that case, this Court held:

Agency decisions not supported by substantial and material evidence are arbitrary and capricious. However, agency decisions with adequate evidentiary support may still be arbitrary and capricious if caused by a clear error in judgment.
A reviewing court should not apply Tenn.Code Ann. § 4-5-322(h)(4)’s ‘arbitrary and capricious’ standard of review mechanically. In its broadest sense, the standard requires the court to determine whether the administrative agency has made a clear error in judgment. An arbitrary decision is one that is not based on any course of reasoning or exercise of judgment, or one that disregards the facts or circumstances of the case without some basis that would lead a reasonable person to reach the same conclusion.

Jackson Mobilphone, 876 S.W.2d at 110-111 (citations omitted).

The undisputed facts of this case establish that Mr. Mosley knew that he was repeatedly violating the laws of Georgia and Virginia and that he was exceeding the authority of his Tennessee license by his deliberate actions in this case. No “clear error in judgment” by the administrative tribunal has occurred in this case.

We now address the controlling issue. The Uniform Administrative Procedures Act, first adopted in Tennessee by Chapter 725 of the Public Acts of 1974, superceded and repealed earlier procedural statutes applicable to state agencies, with few exceptions. Ogden v. Kelley, 594 S.W.2d 702 (Tenn.1980). This act, at least as nearly as differing state government organization will allow, is patterned after the Federal Administrative Procedures Act. 5 U.S.C.A. § 551, et seq.

Today every state has a body of legislation dealing with administrative procedure and control....
The state systems have much in common, especially in terms of general principles. The fundamental principles have, over time, been guided by the general law based on both federal and state developments. It must be remembered that in any context, the basic concepts and principles must be adjusted to the particular administrative scheme whether state or federal.

Charles H. Koch, Jr., Administrative Law and Practice § 2.31 (2nd ed.1997).

Tennessee Code Annotated section 4-5-103 (1998) provides, in pertinent part:

(a) This chapter shall not be construed as in derogation of the common law, but as remedial legislation designed to clarify and bring uniformity to the procedure of state administrative agencies and judicial review of their determination; and this chapter shall be given a liberal construction and any doubt as to the existence or extent of a power conferred shall be resolved in favor of the existence of the power.

In appellate application of this “substantial and material evidence” standard of review, it has been held:

We use the same standard to review administrative decisions that trial courts use. See Estate of Street v. State Bd. of Equalization, 812 S.W.2d 583, 585 (Tenn.Ct.App.1990). When we are reviewing the evidentiary foundation of an administrative decision under Tenn.Code Ann. § 4-5-322(h)(5), we are not permitted to weigh factual evidence and substitute our own conclusions and judgment for that of the agency, even if the evidence could support a different determination than the agency reached. See Tenn.Code Ann. § 4-5-322(h); Humana of Tenn. v. Tennessee Health Facilities Comm’n, 551 S.W.2d 664, 667 (Tenn.1977).

Ware v. Greene, 984 S.W.2d 610, 614 (Tenn.Ct.App.1998), Applying this standard to the undisputed evidence in this case, it is difficult to envision a basis upon which the administrative tribunal could have reached any other conclusion than that which it did reach as to the guilt of Mosley.

The controlling issue in this case, which involves the propriety of the sanctions imposed by the administrative tribunal, is subject to an even more restrictive standard of appellate review. The Supreme Court of Tennessee has observed:

As noted by the learned Chancellor: “[t]he appropriate remedy is peculiarly within the discretion of the [agency] ...” Having found grounds to affirm the procedures employed, facts found, and conclusions reached, we will not interfere with the sanctions imposed upon Dr. McClellan. We remand for the appropriate imposition of those sanctions and tax the costs of this appeal to Dr. McClellan.

McClellan v. Bd. of Regents, 921 S.W.2d 684, 693 (Tenn.1996).

In reversing the United States District Court for the Middle District of Tennessee, the United States Court of Appeals for the Sixth Circuit held:

Determination of a sanction to be applied by an administrative agency, if within bounds of its lawful authoi’ity, is subject to very limited judicial review. Kulkin v. Bergland, 626 F.2d 181, 184 (1st Cir.1980). “ ‘The relations of remedy to policy is peculiarly a matter of administrative competence.’ ” Butz v. Glover Livestock Commission Co., 411 U.S. 182, 185, 93 S.Ct. 1455, 1458, 36 L.Ed.2d 142 (1973) (quoting American Power Co. v. S.E.C., 329 U.S. 90, 112, 67 S.Ct. 133, 146, 91 L.Ed. 103 (1946)). The reviewing court’s function is only to “determine the validity of the questioned administrative action,” not to review the sanctions. Martin v. United States, 459 F.2d at 302; G.H. Miller & Co. v. United States, 260 F.2d 286, 296 (7th Cir.1958) (en banc) cert. denied, 359 U.S. 907, 79 S.Ct. 582, 3 L.Ed.2d 572 (1959).
While the de novo provision of the Food Stamp Act raises certain problems, it does not, in our view, call for a departure from the usual standard of review concerning sanctions.
Kulkin v. Bergland at 184; see also Broad Street Food Market, Inc. v. United States, 720 F.2d 217 at 220 (1st Cir.1983). Once the trial court confirmed that there were repeated violations of the law and regulations as determined by appellant, “the court’s only reasoning task is to examine the sanction imposed in light of the administrative record to judge whether the agency properly applied the regulations, i.e., whether the sanction is ‘unwarranted in law ... or without justification in fact....’” See Butz v. Glover Livestock Commission Co., 411 U.S. 182, 185-189, 93 S.Ct. 1455, 1457-1459, 36 L.Ed.2d 142 (1973), cited in Broad Street Food Market, supra, at 220. We agree with the First Circuit’s rationale in this respect. Cf. Cross v. United States, 512 F.2d 1212, 1218 (4th Cir.1975) (en banc). See also the incisive dissent by Rullel, J., in the latter case at 1222; Wolf v. United States, 662 F.2d 676, 678 (10th Cir.1981).

Woodard v. U.S., 725 F.2d 1072, 1077 (6th Cir.1984).

The leading case relative to the standard of judicial review of sanctions imposed by an administrative agency is Butz v. Glover Livestock Commission Co., 411 U.S. 182, 93 S.Ct. 1455, 36 L.Ed.2d 142 (1973). The Court declares:

The applicable standard of judicial review in such cases required review of the Secretary’s order according to the “fundamental principle ... that where Congress has entrusted an administrative agency with the responsibility of selecting the means of achieving the statutory policy ‘the relation of remedy to policy is peculiarly a matter for administrative competence.’ ” American Power Co. v. SEC, 329 U.S. 90, 112, 67 S.Ct. 133, 91 L.Ed. 103 (1946). Thus, the Secretary’s choice of sanction was not to be overturned unless the Court of Appeals might find it “unwarranted in law or ... without justification in fact....” Id., at 112-113, 67 S.Ct. 133; Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194, 61 S.Ct. 845, 85 L.Ed. 1271 (1941); Moog Industries, Inc. v. FTC, 355 U.S. 411, 413-414, 78 S.Ct. 377, 2 L.Ed.2d 370 (1958); FTC v. Universal-Rundle Corp., 387 U.S. 244, 250, 87 S.Ct. 1622, 18 L.Ed.2d 749 (1967); 4 K Davis, Administrative Law § 30.10, pp 250-251 (1958). The Court of Appeals acknowledged this definition of the permissible scope of judicial review but apparently regarded respondent’s suspension as “unwarranted in law” or “without justification in fact.” We cannot agree that the Secretary’s action can be faulted in either respect on this record.
We read the Court of Appeals’ opinion to suggest that the sanction was “unwarranted in law” because “uniformity of sanctions for similar violations” is somehow mandated by the Act. We search in vain for that requirement in the statute. The Secretary may suspend “for a reasonable specified period” any registrant who has violated any provision of the Act. 7 USC § 204. Nothing whatever in that provision confines its application to cases of “intentional and flagrant conduct” or denies its application in cases of negligent or careless violations. Rather, the breadth of the grant of authority to impose the sanction strongly implies a congressional purpose to permit the Secretary to impose it to deter repeated violations of the Act, whether intentional or negligent. Hyatt v. United States, 276 F.2d 308, 313 (C.A.10 1960); G.H. Miller & Co. v. United States, 260 F.2d 286 (C.A.7 1958); In re Silver, 21 Agric. Dec. 1438, 1452 (1962). The employment of a sanction within the authority of an administrative agency is thus not rendered invalid in a particular case because it is more severe than sanctions imposed in other cases. FCC v. WOKO, 329 U.S. 223, 227-228, 67 S.Ct. 213, 91 L.Ed. 204 (1946); FTC v. Universal-Rundle Corp., 387 US, at 250, 251; G.H. Miller & Co. v. United States, supra, at 296; Hiller v. SEC, 429 F.2d 856, 858-859 (C.A.2 1970); Dlugash v. SEC, 373 F.2d 107, 110 (C.A.2 1967); Kent v. Hardin, 425 F.2d 1346, 1349 (C.A.5 1970).
Moreover, the Court of Appeals may have been in error in acting on the premise that the Secretary’s practice was to impose suspensions only in cases of “intentional and flagrant conduct.” The Secretary’s practice, rather, apparently is to employ that sanction as in his judgment best serves to deter violations and achieve the objectives of that statute. Congress plainly intended in its broad grant to give the Secretary that breadth of discretion. Therefore, mere unevenness in the application of the sanction does not render its application in a particular case “unwarranted in law.”

Butz, 411 U.S. at 185-88, 93 S.Ct. 1455.

In Goldstein v. United States, 9 F.3d 521 (6thCir.1993), affirming the district court in upholding an administrative decision disqualifying a store from participating in the food stamp program, the court held:

We recently examined the scope of judicial review under 7 U.S.C. § 2023 in Abboud Market, Inc. v. Madigan, 943 F.2d 51, 1991 WL 165656, No. 90-3695 (6thCir.Aug.29, 1991) (unpublished), and take this opportunity to reiterate that scope. “Determination of a sanction to be applied by an administrative agency, if within bounds of its lawful authority, is subject to very limited judicial review.” Woodard v. United States, 725 F.2d 1072, 1077 (6thCir.1984) (citing Kulkin v. Bergland, 626 F.2d 181, 184 (1stCir.1980)); Martin v. United States, 459 F.2d 300, 301-02 (6thCir.), cert. denied, 409 U.S. 878, 93 S.Ct. 129, 34 L.Ed.2d 131 (1972). Once the trial court has confirmed that the store has violated the statutes and regulations, the court’s only task is to examine the sanction imposed in light of the administrative record in order to judge whether the agency properly applied the regulations, i.e., whether the sanction is “unwarranted in law” or “without justification in fact.” Woodard, 725 F.2d at 1077 (quoting Butz v. Glover Livestock Comm’n Co., Inc., 411 U.S. 182, 185-89, 93 S.Ct. 1455, 1458-59, 36 L.Ed.2d 142 (1973)). If the agency properly applied the regulations, then the court’s job is done and the sanction must be enforced. The trial de novo is limited to determining the validity of the administrative action; the severity of the sanction is not open to review. Woodard, 725 F.2d at 1078 (quoting H.R.Rep. No. 464, 95th Cong., 1st Sess. 397-98, reprinted in 1977 U.S.C.C.A.N.1978, 2326-27).
Thus, the question before us is whether the FNS acted within its authority in permanently disqualifying Goldstein from the food stamp program. Because Goldstein was found to have violated the regulations by trafficking in food stamps, the penalty of permanent disqualification from participation in the program was imposed. 7 C.F.R. § 278.6(a) states that the FNS may impose the sanction of disqualification for a violation of the statutes or regulations; such disqualification shall be permanent if the disqualification is based on trafficking. Further, the regulations do not require that, before permanent disqualification is imposed, a store owner receive a warning, intend to violate the regulations, or benefit from the trafficking. See Woodard, 725 F.2d at 1076 (sanction for trafficking regardless of owner’s lack of knowledge of violation); Freedman v. United States Dept. of Agriculture, 926 F.2d 252, 261 n. 13 (3d Cir.1991) (noting that permanent disqualification of even an “innocent owner” is consistent with the legislative history of the statutes and regulations). The regulations thus authorize the FNS to prescribe the sanction imposed in this case.

Goldstein, 9 F.3d at 523-524.

In a similar context, the United States Fifth Circuit Court of Appeals explained the appropriate standard of review as to administrative sanctions.

Judicial review of an administrative sanction is extremely limited. The administrator’s selection of the appropriate sanction to effectuate the statutory policy is one peculiarly within the administrative competence, and the administrative choice of sanction is not to be overturned on judicial review unless found to be either unwarranted in law or else without justification in fact. Butz v. Glover Livestock Commission Co., Inc., 411 U.S. 182, 185-186, 93 S.Ct. 1455, 1458, 36 L.Ed.2d 142 (1973); J. Acevedo and Sons v. United States, 524 F.2d 977 (5th Cir.1975).

Wayne Cusimano, Inc., 692 F.2d at 1030.

The Uniform Administrative Procedures Act is applicable to proceedings to revoke or suspend the license of an insurance agent. Tenn.Code Ann. § 56-6-161. Also, Tennessee Code Annotated section 56-6-155 provides:

(a) The commissioner may suspend, revoke, or refuse to issue or renew any license under this part for any one (1) or more of the following causes:
(7) Committing any unfair trade practice or fraud proscribed in this code;
(8) Using, in the conduct of affairs under such license, fraudulent, coercive, or dishonest practices;

(10) Being demonstrably incompetent, untrustworthy, or financially irresponsible;

(13) Violating, or failing to comply with, any insurance laws, or any lawful rule or order of the commissioner or of a commissioner of another state; or
(14) Any cause for which issuance of he license could have been refused had it then existed and been known to the commissioner at the time of issuance.
(b) In addition to or in lieu of any denial, suspension, or revocation of a license hereunder, the commissioner may assess a civil penalty against any person violating this part in an amount not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) for each violation.

TenmCode Ann. § 56-6-155 (2000).

At the conclusion of its extensive findings of fact, the administrative tribunal iterated conclusions of law, among which were:

53.Tenn.Code Ann. § 56-6-155(a)(8) states, in pertinent part, that the Commissioner may suspend, revoke, or refuse to issue or renew any license under this part if she finds that one holding a license to sell insurance has used, in the conduct of affairs under such license, fraudulent, coercive, or dishonest practices.
54. Tenn.Code Ann. § 56-6-155(a)(10) states, in pertinent part, that the Commissioner may suspend, revoke, or refuse to issue or renew any license under this part if she finds that one holding a license to sell insurance has been shown to be demonstrably incompetent, untrustworthy, or financially irresponsible.
55. TenmCode Ann. § 56-6-155(a)(13) states, in pertinent part, that the Commissioner may suspend, revoke, or refuse to issue or renew any license under this part if she finds that one holding a license to sell insurance has violated, or failed to comply with, any insurance laws, or any lawful rule or order of the commissioner or of a commissioner of another state.
56. The Tennessee Rules of Evidence state in Rule 202(a), under Mandatory Judicial Notice of Law, that “The Court shall take judicial notice of (1) the common law, (2) the constitutions and statutes of the United States and of every state, territory and other jurisdiction of the United States, (3) all rules adopted by the United States Supreme Court or by the Tennessee Supreme Court, and (4) any rule or regulation of which a statute of the United States or Tennessee mandates judicial notice.” The Respondent’s argument that by failing to enter into evidence the insurance statutes of the States of Georgia and Virginia the State has somehow failed to meet its burden is without merit. The State did request that the undersigned take judicial notice of these statutes, and provided copies with its post-trial brief, as was arranged at the hearing.
57. The Code of Georgia Annotated, Section 33-23-4(a) states, in pertinent part, that no person shall act as or hold himself or herself out to be an agent, subagent, counselor, adjuster, or insurance agency in the State of Georgia unless such person first obtains a license from the State of Georgia.
58. The Code of Virginia Annotated, Section 38.2-1822 states, in pertinent part, that no person shall act as an agent in the transaction of insurance in the Commonwealth of Virginia unless he is licensed as an agent in the Commonwealth.
59. The State has met its burden of proof by a preponderance of the evidence that Mosley violated the laws of the commissioner of another jurisdiction on twelve (12) separate occasions by acting as an agent in the states of Georgia and Virginia on a total of twelve (12) different occasions without being licensed as an insurance agent in those states, as required by the laws of those states.

The sanctions imposed by the administrative tribunal upon Mr. Mosley were clearly warranted in law. In view of the essentially undisputed facts as found by the ALJ, no basis exists for finding that the sanction of revocation of license was “without justification in fact.”

It is obvious from the entire administrative record and from argument at the bar of this Court that Mosley’s repeated transgressions in taking applications for policies of insurance in the states of Georgia and Virginia while indicating that such applications were, in fact, executed in Tennessee were committed intentionally and with deliberation. He considered these transgressions to be of minimal significance and, in fact, to be merely accommodations to policy holders. However, he knew that he was not licensed to act as an insurance agent in either Georgia or Virginia, and it is clear that neither the State of Tennessee nor the administrative tribunal considering the case shared his view as to the seriousness of his actions.

Neither the chancery court nor the Court of Appeals is empowered to substitute judicial judgment in the place of the judgment of an administrative tribunal acting within the scope of its statutory authority. Neither the chancellor nor this Court may soften the sanctions imposed by the administrative tribunal as the sanctions imposed by the administrative tribunal are clearly warranted in law and justified in fact. At this point, the judicial inquiry comes to an end.

The trial court erred in modifying the sanctions imposed by the administrative tribunal. The judgment of the Chancery Court of Davidson County is reversed, and the judgment of the administrative tribunal is reinstated in its entirety.

Costs of the cause are assessed against Appellee, and the case is remanded to the trial court for such further proceedings as may be necessary.

      . The provisions of this statute were in effect at the time of all of the events that form the basis for the revocation of the license of Mr. Mosley. Section 56-6-155 was repealed by Chapter 798 of the Public Acts of 2002 effective January 1, 2003. Section 13 of Chapter 798 of the Public Acts of 2002 replaced former Tennessee Code Annotated section 56-6-155, reiterating, in large measure, the same grounds for revocation as was contained in the previous section. Section 13 is codified as Tennessee Code Annotated section 56-6-112 (2003). These statutory changes are not deemed to materially affect the outcome of this case.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    QWEST INTERNATIONAL COMMUNICATIONS, INC. (and/or Qwest Communications International, Inc.), Qwest Communications Corp., and SP Construction Services, Inc., Petitioners, v. AT & T CORP. and AT & T Communications, Inc. of the Southwest, Inc., Respondents.
    No. 03-0825.
    Supreme Court of Texas.
    June 24, 2005.

      Michael J. Clark and Curtis J. Kurhajec, Thornton Summers Bieehlin Dunham & Brown, C. Mark Stratton and Sue Melissa Lee, Henslee, Fowler, Hepworth & Schwartz, LLP, Austin, for other interested parties.
    Thomas C. Wright, Julia Leigh Kurtz, Wright Brown & Close, LLP, Houston, Molly H. Hatchell, Mike A. Hatchell, Locke Liddell & Sapp LLP, Delno J. Gro-senheider, Joseph Loiacono II, Wilson Grosenheider Moore & Jacobs, J. Stephen Ravel, Michael Shaunessy, Bickerstaff Heath Smiley Pollan Kever & McDaniel, Austin, Bruce A. Featherstone, and Nancy C. Shea, Featherstone & Shea, Denver, CO, for Petitioners.
    John K. Schwartz, Jennifer Lea Mathis-Volk and Barbara M. Ellis, Locke Liddell & Sapp, LLP, Houston, Joseph Latting, Austin, for Respondents.
   PER CURIAM.

We must decide whether a corporate policy that promotes “a hurried pace” and results in accidentally cutting a competitor’s fiber-optic cables is legally sufficient to support an award of exemplary damages. Under the facts presented here, we hold it is not. We reverse that portion of the court of appeals’ judgment affirming the award of such damages. 114 S.W.3d 15, 23-28.

Qwest International Communications (“Qwest”) and AT & T Corporation (“AT & T”) are competitors in fiber-optic communications. During late 1997, Qwest laid fiber-optic cables for itself, GTE, and others in utility rights-of-way between Seguin and Austin, Texas. On three occasions, cable-laying crews for Qwest or its subcontractors cut AT & T’s fiber-optic cable.

A jury found negligence on all three occasions, and that Qwest was hable for all three as it controlled its subcontractors’ activities. The jury awarded actual damages (representing the cost of temporary and permanent repairs and rerouting) of $205,187.69 for the first cut, $339,809.98 for the second, and $143,583.83 for the third. The jury also found Qwest acted with malice in the first and third cuts, and awarded exemplary damages of $350 million. The trial court reduced the latter to $467,808.91 pursuant to statute. Tex. Civ. Prac. & Rem.Code § 41.008(b). The court of appeals affirmed, 114 S.W.3d 15, 23-28, and Qwest petitioned this Court for review of the exemplary damages award only.

To recover exemplary damages, AT & T had to present clear and convincing evidence that (as defined in the court’s charge) Qwest’s conduct “when viewed objectively from the standpoint of [Qwest] at the time of its occurrence involve[d] an extreme degree of risk, considering the probability and magnitude of the potential harm to others.” See Act of April 20, 1995, 74th Leg., R.S., ch. 19, § 1,1995 Tex. Gen. Laws 108, 109 (amended 2003) (current version at Tex. Civ. Prac. & Rem. Code § 41.001(11)) (emphasis added); see also Tex. Civ. Prac. & Rem.Code § 41.003(a)(2) & (b). As clear and convincing evidence was required, we review all the evidence in the light most favorable to the jury’s finding, taking into account contrary undisputed facts, to determine whether reasonable jurors could have formed a firm belief or conviction regarding malice. Southwestern Bell Tel Co. v. Garza, 164 S.W.3d 607, 619 (Tex.2004).

In addition, AT & T had to show that Qwest as a corporation (rather than individual employees) is liable for exemplary damages. A corporation is liable for exemplary damages only if it (1) authorizes or ratifies an agent’s malice, (2) maliciously hires an unfit agent, or (3) acts with malice through a vice principal. See Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921-22 (Tex.1998); Hammerly Oaks, Inc., v. Edwards, 958 S.W.2d 387, 391 (Tex.1997). In this case, AT & T relies on the first and third grounds.

We hold the evidence is legally insufficient to show either. Both cuts on which the malice findings were based resulted from the decisions of lower-level employees on-site. In the first, a Qwest foreman on-site told a plow driver to continue digging after an AT & T observer requested a delay to retrieve a tool and find thé exact location of AT <& T’s cable. The other cut occurred when, according to the subcontractor, the AT & T cable “ended up where I didn’t think it was supposed to be.” In neither case did Qwest corporate officers authorizé or ratify the cut, or know about these circumstances until after the accidents occurred.

AT & T’s arguments and evidence on exemplary damages focused on policy decisions made at higher levels, not on negligent application of those policies by on-site employees. In affirming the award of exemplary damages in this case, the court of appeals found Qwest acted maliciously by “fostering a corporate environment of rapid cable-laying operations in the same rights-of-way and in close proximity to AT & T’s cable.” 114 S.W.3d at 26. As to the latter, Qwest had little choice; it was undisputed that (as the court of appeals noted) the narrow width of the utility easements here “dictates that underground cables be buried near to one another.” Id. at 21.

As to the former, a general corporate policy to work rapidly is insufficient (without more) to support exemplary damages. Few businesses do not have such policies, as quick work is often a matter of survival in a competitive market, both for the one doing the work and the customers who want it done. Such policies cannot, standing alone, constitute malice.

As AT & T’s claim related to issuance of the policies, not negligent application of them by on-site employees, exemplary damages were appropriate only if those responsible for adopting the policies knew they posed an extreme degree of risk. See Act of April 20, 1995, 74th Leg., R.S., ch. 19, § 1, 1995 Tex. Gen. Laws 108, 109 (amended 2003). In this case, there was evidence that fiber-optic cables are fragile and expensive, and if damaged may cause thousands of customers to lose service. But it was undisputed that cable cuts are frequent and anticipated occurrences in the industry, that AT & T’s cables are cut about 27 times annually, and that most AT <& T calls on the lines here were rerouted in a matter of seconds.

There was also evidence that Qwest was facing substantial delay penalties because the cable project was behind schedule; that its workers were primarily new hires with limited training or experience who worked long shifts; and that upper management was “pushing to get the job done.” What is lacking is clear and convincing evidence that Qwest’s upper management had actual knowledge that a policy to lay cables rapidly posed a degree of risk that was extreme; knowledge of a remote possibility of serious injury or a high probability of minor injury was not enough. Id. (requiring extreme degree of risk in both probability and magnitude of harm); see Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 785 (Tex.2001); Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 21-23 (Tex.1994); Wal-Mart Stores, Inc. v. Alexander, 868 S.W.2d 322, 326 (Tex.1993). Nor is there evidence that they proceeded with the construction in conscious disregard of such a risk. Based on all the evidence, reasonable jurors could have formed a firm belief that Qwest acted with negligence, but not malice.

We recognize that when haste risks waste to life and limb, it may justify exemplary damages. But we also recognize that in a competitive global economy, time is often of the essence for businesses, jobs, and national productivity and prosperity. The Legislature’s balance of such-competing interests requires courts to adhere to the standard that exemplary damages are available only if a corporation ignores an extreme risk of harm.

Without hearing oral argument, we grant the petition for review, and reverse that portion of the court of appeals’ judgment awarding exemplary damages. Tex. R.App. P. 59.1.

      . The trial court calculated economic damages by adding damages for the first cut and 20 percent of the third cut (representing Qwest's proportionate responsibility), and doubling the total. Neither party challenges this calculation.

      . This was the statute in effect at the time of trial.

      . At worst, there was some evidence that some customers lost service for about three hours.


text:
    Larry MEYER, Petitioner, v. John CATHEY, Respondent.
    No. 03-0938.
    Supreme Court of Texas.
    June 24, 2005.

      Corbet F. Bryant Jr., Monica Wiseman Latin, Jeffrey S. Levinger, Carrington Coleman Sloman & Blumenthal, L.L.P., Dallas, for petitioner.
    James E. Wren, Dale D. Williams, Williams Squires & Wren, L.L.P., Greg White, Ñaman, Howell, Smith & Lee LLP, Waco, Gary L. Richardson, Richardson, Stoops, Richardson & Ward, Tulsa, John H. McElhaney, Locke Purnell Rain & Harrell, Dallas, for respondent.
   PER CURIAM.

This case involves allegations of fraud and breach of fiduciary duty between business associates. John Cathey (“Cathey”) sued Larry Meyer (“Meyer”) alleging that Meyer failed to pay him amounts promised for his work on various real estate development projects. The trial court entered a take-nothing judgment in Meyer’s favor and granted his posttrial motion for discovery sanctions. A divided court of appeals reversed in part, affirmed in part, rendered in part, and remanded in part. 115 S.W.3d 644, 673. Because we conclude that there is legally insufficient evidence that Meyer owed a fiduciary duty to Cath-ey and that there is sufficient evidence to support Meyer’s ratification defense to Cathey’s fraud claims, we reverse the court of appeals’ judgment in part and render judgment that Cathey take nothing on those claims. Furthermore, because we agree that Meyer waived his right to recover discovery abuse sanctions, we affirm the court of appeals’ judgment ordering that Meyer take nothing on his motion for sanctions.

In 1997, Cathey sued Meyer for fraud and breach of fiduciary duty arising out of their collaboration on eight real estate development projects. Over the approximately four-year course of their business arrangement, Meyer and Cathey periodically disagreed over Cathey’s financial interests in the projects. According to Cathey, near the beginning of their relationship, Meyer orally promised to pay him, in addition to a $50,000 base salary, twenty percent of the net profits for projects Cathey found, ten percent of the net profits for projects he worked on but did not find, and a $25,000 bonus for refinancing loans on a previously owned property. Cathey claims that this oral “global agreement,” as well as subsequent oral promises, were not fully honored. He asserts that Meyer would either refuse to put in writing the oral agreement that they reached on a particular project, or present Cathey with a written agreement differing from what had been agreed. In addition, Cathey contends that Meyer secretly paid himself large consulting fees, thereby draining the profits from certain projects.

After a six-week trial, the jury found that Meyer fraudulently induced Cathey to participate in all of the projects, but also that Cathey ratified and waived each incident of fraud. The jury also found that Meyer breached a fiduciary duty owed Cathey regarding two of the projects, but that Cathey knew or should have known of the breach on or before May 22,1995 — two years before he filed this suit and, according to Meyer, after the applicable statute of limitations had expired. The trial court rendered a take-nothing verdict in Meyer’s favor. Several weeks later, Meyer filed a motion for discovery abuse sanctions, which the trial court granted.

A divided court of appeals reversed in part, holding that Cathey was entitled to recover on his fraud and breach of fiduciary duty claims with respect to all but one of the eight projects. 115 S.W.3d at 673. The court of appeals also reversed the sanctions award. Id. Both parties have petitioned this Court for review, alleging numerous points of error. For the reasons explained below, we reverse the court of appeals’ judgment in part, affirm it in part, and render judgment that Cathey take nothing on his fraud and breach of fiduciary duty claims and that Meyer take nothing on his motion for sanctions.

First, we address Meyer’s claim that there is legally insufficient evidence to support the jury’s finding that Meyer owed Cathey a fiduciary duty with respect to their final two projects: a movie theater complex in Waco and a condominium development in Dallas. The court of appeals found “more than a mere scintilla of evidence that a fiduciary relationship existed”:

Prior to the Dallas and Waco projects, Cathey and Meyer worked together on other projects for three years. Cathey had a five percent partnership interest in one of the [prior] apartment complex projects, and he co-signed a security agreement for a loan used to finance [that project]. The parties do not dispute that Meyer was always in charge of all aspects of the projects and made the final decisions. Meyer controlled the financing and the books, and Cathey relied on and trusted Meyer to treat him fairly and keep accurate financial records. Meyer told Cathey the two of them would “make millions” together. Cathey considered Meyer a friend; he testified they ate lunch together every day for four years.... The evidence is legally sufficient to support the jury’s finding that “Cathey justifiably placed trust and confidence in Meyer to act in Cathey’s best interest.”

115 S.W.3d at 669-70 (citation and footnote omitted). We disagree that these facts establish a fiduciary relationship.

It is well settled that “not every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship.” Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 176-177 (Tex.1997) (citing Crim Truck & Tractor Co. v. Navistar Int’l Transp. Corp., 823 S.W.2d 591, 594 (Tex.1992), superseded by statute on other grounds as noted in Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 225-26 (Tex.2002)). “ ‘Where the underlying facts are undisputed, determination of the existence, and breach, of fiduciary duties are questions of law, exclusively within the province of the court.’ ” Nat’l Med. Enters. v. Godbey, 924 S.W.2d 123, 147 (Tex.1996) (quoting Lacy v. Ticor Title Ins. Co., 794 S.W.2d 781, 787 (Tex.App.-Dallas 1990), writ denied per curiam, 803 S.W.2d 265 (Tex.1991)). In certain formal relationships, such as an attorney-client or trustee relationship, a fiduciary duty arises as a matter of law. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 199 (Tex.2002); see also Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex.1998). We also recognize an informal fiduciary duty that arises from “a moral, social, domestic or purely personal relationship of trust and confidence.” Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 287 (Tex.1998); see also Schlumberger Tech. Corp., 959 S.W.2d at 176. However, “[i]n order to give full force to contracts, we do not create such a relationship lightly.” Schlumberger Tech. Corp., 959 S.W.2d at 177. “To impose an informal fiduciary duty in a business transaction, the special relationship of trust and confidence must exist prior to, and apart from, the agreement made the basis of the suit.” Associated Indem. Corp., 964 S.W.2d at 288.

Here, there is no evidence of such a preexisting relationship between Meyer and Cathey. The court of appeals’ reliance on Meyer’s and Cathey’s work on prior projects is misplaced. See 115 S.W.3d at 669. These earlier projects were arms-length transactions entered into for the parties’ mutual benefit, and thus do not establish a basis for a fiduciary relationship. See Associated Indem. Corp., 964 S.W.2d at 288 (holding that preexisting indemnity agreement between surety and contractor “was an arms-length transaction entered into for the parties’ mutual benefit” and thus did not “justify! ] a special relationship of trust and confidence”). In fact, the agreements governing the earlier projects expressly disavowed the creation of any fiduciary duties or other special relationships.

Furthermore, the fact that Cathey trusted Meyer does not transform their business arrangement into a fiduciary relationship. See Morris, 981 S.W.2d at 674 (“ ‘[M]ere subjective trust does not ... transform arm’s-length dealing into a fiduciary relationship.’ ” (quoting Schlumberger Tech. Corp., 959 S.W.2d at 177)). Nor can we justify imposing a fiduciary duty based on the fact that, for four years, Cathey and Meyer were friends and frequent dining partners. See Crim Truck & Tractor Co., 823 S.W.2d at 595 (“[T]he fact that the relationship has been a cordial one, of long duration, [is not] evidence of a confidential relationship.”). In sum, there is insufficient evidence that Meyer owed Cathey a fiduciary duty. Accordingly, Cathey cannot recover on his breach of fiduciary duty claims.

Next we address whether there was sufficient evidence to support the jury’s ratification finding. The jury found that Meyer fraudulently induced Cathey’s participation in every project, but that Cathey ratified the fraud. The court of appeals held that the ratification evidence was legally insufficient. 115 S.W.3d at 661. Again, we disagree.

In Fortune Production Co. v. Conoco, Inc., 52 S.W.3d 671, 680 (Tex.2000), we held that a party who does not have a continuing obligation to perform under a contract, but nevertheless continues to perform after learning of a fraud, ratifies the fraud and therefore cannot recover damages for the period of time when the party knew of the fraud. Here, the court of appeals concluded that the ratification evidence relating to certain projects was insufficient because there was no evidence that, at the time he was providing services to Meyer, Cathey knew of Meyer’s intent to diminish profits through self-paid consultation fees. 115 S.W.3d at 660. But Cathey’s fraud claim was not limited to the consultation fee allegations; Cathey also alleged that Meyer fraudulently induced Cathey’s participation in all of the projects by misrepresenting (in their global agreement) the compensation that Cathey was to receive for his work. Once the jury determined that Meyer fraudulently induced Cathey, it was asked if “Cathey ratified the conduct of Meyer, if any, that [it] found constituted fraud.” Because the ratification question was submitted broad form, we do not know what conduct the jury found to constitute fraud. We must therefore consider whether there is sufficient evidence to support ratification under any fraud scenario presented to. the jury. See Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex.2003) (“In conducting a legal sufficiency review, we must view the evidence in a light that tends to support the disputed finding.... ”).

We conclude that there is sufficient evidence that Cathey ratified the fraud concerning the alleged compensation misrepresentations. The evidence shows that during their first project, Cathey agreed in writing to a compensation arrangement differing from the compensation terms that allegedly existed under the global agreement. Although Cathey was aware of this discrepancy, he continued to work with Meyer despite being under no obligation to do so. Thus, under our holding in Fortune Production Co., Cathey ratified any fraud arising from misrepresentations allegedly made in the global agreement. See 52 S.W.3d at 680. Accordingly, Cath-ey cannot recover on his fraud claims.

Finally, we consider Cathey’s contention that the trial court abused its discretion by awarding discovery abuse sanctions. Prior to their business arrangement, Cathey gave Meyer a résumé, which Cathey now admits misrepresented his work experience and education. However, during his pretrial deposition, and in his responses to Meyer’s request for admissions, Cathey maintained that the résume’s content was accurate. Thereafter, Meyer sought out and deposed several individuals whose testimony contradicted the assertions made in Cath-ey’s résumé. At trial, Cathey admitted not only that his résumé contained numerous inaccuracies, but also that he lied when questioned about the résumé during his deposition. Several weeks after the trial court rendered its final judgment, Meyer moved for sanctions pursuant to Texas Rules of Civil Procedure 215.3 and 215.4(b), seeking reimbursement for the expenses incurred by way of his investigation into Cathey’s résumé. The trial court granted the motion and awarded $25,978.73 as sanctions. Cathey contends that this award was an abuse of discretion because, by waiting until after trial to file his motion, Meyer waived his sanctions claim. We agree that Meyer waived any entitlement to sanctions.

In Remington Arms Co. v. Caldwell, 850 S.W.2d 167, 170 (Tex.1993), we explained the circumstances in which, by failing to obtain a pretrial ruling on a discovery dispute, a party waives his or her claim for discovery abuse sanctions. In that case, the trial court issued a postverdict order awarding death penalty sanctions against Remington, which was based in part on pretrial discovery abuse. Id. at 169-70. Addressing Remington’s request for mandamus relief, we stated:

Remington contends that no trial court may impose discovery sanctions posttrial for pretrial discovery abuse. We cannot agree. Such a rule would absolutely bar imposition of sanctions for discovery abuse revealed for the first time during or after the trial. We do, however, agree that the failure to obtain a pretrial ruling on discovery disputes that exist before commencement of trial constitutes a waiver of any claim for sanctions based on that conduct. Here, of the twelve incidents of misconduct cited in the sanctions order, nine concern pretrial conduct of which Craig was aware before trial. We hold that Craig waived any objections to these matters by failing to request a pretrial hearing on the alleged discovery abuse and by requesting a preferential trial setting.
On the other hand, if pretrial discovery abuse is not revealed until after the trial has begun, or even after trial, a party cannot be said to have waived a claim for sanctions.

Id. at 170 (citations and footnote omitted).

The court of appeals held that Meyer had a reasonable evidentiary basis for bringing a pretrial motion. 115 S.W.3d at 673. Meyer contends, however, that until Cathey admitted at trial to lying in his discovery responses, he (Meyer) did not have “conclusive evidence” upon which to bring a motion for sanctions. Under our decision in Remington Arms Co., waiver bars a trial court from awarding posttrial sanctions based on pretrial conduct of which a party “was aware” before trial; lack of “conclusive evidence” is not an excuse. See Remington Arms Co., 850 S.W.2d at 170. Here, Meyer was clearly aware of Cathey’s discovery misconduct before trial: he obtained pretrial deposition testimony that directly contradicted Cathey’s deposition testimony and other discovery responses. Accordingly, by not objecting prior to trial, Meyer waived his sanctions claim.

In sum, we conclude that: (1) Meyer did not owe Cathey a fiduciary duty; (2) there is sufficient evidence to support the jury’s ratification finding; and (3) Meyer waived his claim for discovery abuse sanctions. For these reasons, without hearing oral argument, we grant the petition for review, and we reverse the court of appeals’ judgment in part and affirm it in part. Tex.R.App. P. 59.1, 60.2(a), (c). We render judgment that Cathey take nothing on his fraud and breach of fiduciary duty claims and that Meyer take nothing on his motion for sanctions. Id. 60.2(c).

      . Cathey filed this suit on May 22, 1997. If a two-year limitations period applied, then the jury’s finding would bar Cathey’s breach of fiduciary duty claim. The parties, however, dispute whether the proper limitations period is two or four years. Because we decide this claim on separate grounds, we do not reach this issue.

      . The court of appeals affirmed the take-nothing judgment on all claims relating to one project, for which it found that there was no evidence of actual damages. 115 S.W.3d at 667, 673. The court also remanded for a new tried all claims relating to a second project, for which it was unable to determine the appropriate damage award. Id.

      . Rule 215.3 states:
      If the court finds a party is abusing the discovery process in seeking, making or resisting discovery or if the court finds that any interrogatory or request for inspection or production is unreasonably frivolous, oppressive, or harassing, or that a response or answer is unreasonably frivolous or made for purposes of delay, then the court in which the action is pending may, after notice and hearing, impose any appropriate sanction authorized by paragraphs (1), (2), (3), (4), (5), and (8) of Rule 215.2(b). Such order of sanction shall be subject to review on appeal from the final judgment.
      Tex.R. Civ. P. 215.3.

      . Rule 215.4(b) states:

        Expenses on Failure to Admit. If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 198 and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, he may apply to the court for an order requiring the other party to pay him the reasonable expenses incurred in making that proof, including reasonable attorney fees. The court shall make the order unless it finds that (1) the request was held objectionable pursuant to Rule 193, or (2) the admission sought was of no substantial importance, or (3) the party failing to admit had a reasonable ground to believe that he might prevail' on the matter, or (4) there was other good reason for the failure to admit.
      Tex.R. Civ. P. 215.4(b) (footnote omitted).


author: PHIL JOHNSON, Chief Justice.

text:
    Dwayne R. McBEAN, Appellant, v. The STATE of Texas, Appellee.
    No. 07-02-0455-CR.
    Court of Appeals of Texas, Amarillo.
    Dec. 9, 2004.
    Discretionary Review Refused May 4, 2005.

      Michael S. Chandler, Lubbock, for Appellant.
    Wade Jackson, Asst. Criminal District Atty., Lubbock, for Appellee.
    Before JOHNSON, C.J., and REAVIS and CAMPBELL, JJ.
   OPINION

PHIL JOHNSON, Chief Justice.

Appellant Dwayne R. McBean appeals from his conviction for aggravated sexual assault and sentence of 60 years confinement. Presenting two issues, he urges that the trial court erred by overruling his challenge to a veniremember and that he received ineffective assistance of counsel during the punishment phase of trial. We affirm.

BACKGROUND

Appellant Dwayne R: McBean and Tina Williams were involved in an extended personal relationship during which Williams and her two children would occasionally visit at appellant’s home. During one such stay, Williams discovered appellant sexually assaulting her 13-year old daughter. Appellant was indicted in Lubbock County for aggravated sexual assault. The Lubbock County District Attorney’s office represented the State.

Trial was to a jury. One member of the jury venire was Kim Hayes, an assistant district attorney in the Lubbock County DA’s office. During voir dire, appellant’s counsel questioned Hayes as to whether she would be able to be an impartial juror considering that her employer was the agency prosecuting the case. Hayes stated that she had no knowledge of or information as to the case and she could be fair and impartial as a juror. Appellant’s counsel challenged her for cause. Appellant’s counsel also advised the trial court that there were numerous veniremembers that counsel already had decided to strike and that if a peremptory challenge had to be used to strike Hayes, which it would be, then appellant would have to ask the Court to grant an additional peremptory challenge. The challenge for cause was denied. No other ruling was sought and none was made.

The docket sheet reflects that following voir dire of the jury venire the parties exercised their peremptory challenges then the jury was empaneled and sworn. Although the record does not clearly reflect when the State and appellant handed their peremptory challenge fists to the clerk, see Tex.Crim. Prog.Code Ann. art 35.25, 35.26(a) (Vernon 1989), the'reporter’s record shows that at the conclusion of voir dire a recess was taken, after which the judge announced which venire-members would comprise the jury. After the court announced the members of the jury, counsel for appellant stated that one of appellant’s peremptory challenges had been exercised to strike veniremember Hayes and the remainder of appellant’s challenges had been used. Counsel then identified the seventh juror as objectionable and requested an additional peremptory challenge to strike her. The request was denied and the jury was sworn.

Appellant was found guilty. During the punishment phase of trial the State introduced copies of judgments relating to appellant’s prior misdemeanor offenses. Appellant called two witnesses, Doris Leal, an investigator for the Lubbock County District Attorney’s Office, and Adam Puckett, a probation officer for Lubbock County. Through Leal appellant raised the issue of accepting responsibility for criminal behavior. Leal confirmed that appellant had been placed on community supervision for a misdemeanor offense, pled true to probation violations during a revocation hearing related to that community supervision, and had accepted responsibility for violating his community supervision. Puckett was called to testify regarding probation conditions for sex offenders. Upon cross-examination by the State, Puckett elaborated on sex offender counseling and the importance of offenders accepting responsibility for the charged offense in order for the counseling to be effective.

During summation at the punishment phase, appellant’s counsel reminded the jury that appellant had accepted responsibility for each of the misdemeanor cases and his violations of probation conditions for those cases, and asked the jury to consider probation as an appropriate punishment. The State made no reference during summation to whether appellant had accepted responsibility for the aggravated sexual assault pending before the jury. The jury assessed appellant’s punishment at 60 years confinement.

Appellant’s first issue asserts that the trial court erred in overruling his challenge for cause as to veniremember Hayes because she was an employee of the prosecuting attorney’s office. His second issue alleges ineffective assistance of counsel because counsel failed to object when the prosecutor allegedly commented on appellant’s failure to testify and appellant’s exercise of his right to a trial by jury.

ISSUE ONE: FAILURE TO GRANT CHALLENGE TO A VENIREMEMBER

Appellant does not assert that Hayes was personally biased or prejudiced. Instead, he urges that she was biased as a matter of law because of her employment.

To preserve error for appellate review the complaining party must make a timely objection specifying the grounds for the objection if the grounds are not apparent from the context; the objection must be made at the earliest possible opportunity; the complaining party must obtain an adverse ruling from the trial court; and the issue on appeal must correspond to the objection made at trial. See Tex.R.App. P. 88.1(a)(1)(A); Wilson v. State, 71 S.W.3d 346, 349 (Tex.Crim.App.2002); Dixon v. State, 2 S.W.3d 263, 265 (Tex.Crim.App.1998).

Appellant urges that he preserved error in regard to the trial court’s denial of his challenge to Hayes because he complied with the requirements set out in Johnson v. State, 43 S.W.3d 1 (Tex.Crim.App.2001): he used a peremptory challenge on Hayes, used all his remaining peremptory challenges, and asked for an additional peremptory challenge to strike an objectionable, specified veniremember who served on the jury. We disagree that appellant’s actions to preserve error conformed to those presented in Johnson.

In Johnson the trial court erroneously denied Johnson’s challenges for cause of two veniremembers. Johnson used peremptory challenges to strike the two veniremembers and requested two additional peremptory challenges. The request was denied. Id. at 3. During voir dire Johnson had identified two objectionable veniremembers who eventually sat on the jury. Id. at 4. Thus, in Johnson, a non-capital case as is appellant’s case, the defendant requested additional peremptory challenges, identified specific objectionable veniremembers before his peremptory challenges were exercised, and used peremptory challenges to strike the disqualified veniremembers before names of the jury members were called out. See art. 35.26.

The record before us shows that appellant did not advise the trial court that he had used a peremptory challenge to strike Hayes, request an additional peremptory challenge and identify a specific venire-member who would be struck with the challenge until after he exercised his peremptory challenges, turned in his strike list, and members of the jury had been identified. Appellant’s facts differ from those in Johnson.

Peremptory challenges to prospective jurors are provided pursuant to statute and are made without assigning any reason. Art. 34.14. In a non-capital felony case such as the one under consideration, the State and defendant are each entitled to ten peremptory challenges. Art. 35.15. The challenges are exercised by the parties striking names of prospective jurors from lists provided by the clerk, then returning the lists to the clerk. In a felony trial the first twelve names which have not been struck are called and comprise the jury. See art. 35.26.

The trial court’s refusal to excuse a disqualified veniremember pursuant to a challenge for cause is error, see Johnson, 43 S.W.3d at 5, but does not necessarily constitute harmful error because a peremptory challenge may be used to strike the disqualified veniremember. See id. at 5-7. But, when a challenge for cause is erroneously denied and the challenging party uses a peremptory challenge to strike the disqualified veniremember, then the erroneous denial may be harmful error because the challenging party has effectively received fewer peremptory challenges than provided by statute. See id. at 5-6; Martinez v. State, 763 S.W.2d 413, 415 (Tex.Crim.App.1988). In such a circumstance the aggrieved party has suffered harmful error if the party (1) used a peremptory challenge to strike the challenged, disqualified veniremember; (2) exhausted all remaining peremptory challenges; (3) requested and was denied an additional peremptory challenge, and (4) identified a specific veniremember who would have been removed with the additional challenge, and who thereafter sat as a juror. See Johnson, 43 S.W.3d at 2, 4, 5-6; Martinez, 763 S.W.2d at 415. In instances of erroneous denial of challenges for cause, however, the cases do not always clearly distinguish between steps required to preserve error from harm analysis. See Johnson, 43 S.W.3d at 5 n. 6.

In the matter before us, appellant’s counsel advised the trial court during voir dire that a peremptory challenge would be used on Hayes and that an additional peremptory challenge would be asked for. As of that time, however, voir dire was continuing, appellant had not exercised any peremptory challenges, he was not in the process of exercising his challenges, nor did appellant specifically identify any veniremember who would be stricken if an additional peremptory challenge were to be granted. It was only after the parties had exercised their peremptory challenges and identities of the jurors were revealed that appellant advised the trial court that he had actually exercised a peremptory challenge to strike Hayes, made a request for an additional peremptory challenge, identified one of the chosen jurors as objectionable, and obtained a ruling on the request.

Article 35.26(a) calls for the parties in non-capital felony cases and in capital felony cases wherein the death penalty will not be sought to make or decline to make peremptory challenges before names of those to serve as jurors are determined and the jurors are called. Allowing either party to exercise a peremptory challenge after the jurors are identified would not comply with the unambiguous statutory language. See art. 35.25 and art. 35.26.

Peremptory challenges in civil cases are exercised in a similar manner as that provided for in criminal cases: following jury voir dire peremptory challenges are made by striking or erasing names from venire lists and turning the strike lists in to the clerk. In district court cases the first twelve names not stricken are called and “shall be the jury.” See Tex.R. Civ. P. 232, 234. In Carpenter v. Wyatt Constr. Co., 501 S.W.2d 748 (Tex.Civ.App.-Houston [14th Dist.] 1973, writ ref'd n.r.e.), a civil case, the court addressed a fact situation similar to the one before us. In Carpenter, a challenge for cause was made during voir dire of the jury panel. After peremptory challenges were exercised and the jury had been selected, but before the jury was sworn or seated, the Carpenters made a bill of exceptions. In their bill, they complained of the overruling of their challenge for cause, complained that they were forced to use a peremptory challenge on the venireperson challenged for cause, and identified a specific, chosen juror on whom they would have exercised the challenge had they not been forced to use the strike on the challenged venireperson. The court held that the bill of exceptions was not timely to preserve error. Id. at 750.

Language in Carpenter and other civil cases indicates that in order to preserve error in civil cases the complaining party must identify objectionable venire-members before exercising peremptory challenges. See Hallett v. Houston Northwest Med. Ctr., 689 S.W.2d 888, 890 (Tex.1985) (“For these reasons the complaining party waives any error by not timely bringing such error to the attention of the trial court prior to making his peremptory challenges”); Beavers v. Northrop Worldwide Aircraft Servs., Inc., 821 S.W.2d 669, 673 (Tex.App.-Amarillo 1991, writ denied) (Hallett requires that the trial court be told specifically which objectionable jurors will remain after peremptory strikes are made and requires such notification be made prior to the actual exercise of those strikes.); Carpenter, 501 S.W.2d at 751 (“To preserve error, such objection must be made known before the exercise of peremptory strikes.”).

In order for an objection or complaint as to an action of the trial court to be timely, it must be made at the earliest possible opportunity. See Wilson, 71 S.W.3d at 349; Dixon, 2 S.W.3d at 265. Appellant could have advised the trial court when he actually exercised his peremptory challenges that he was using a challenge to strike Hayes, was exhausting the remainder of his challenges, was requesting an additional peremptory challenge and had to accept a specifically-identified objectionable venireperson because he used a strike on Hayes. For, it was at that time when appellant’s unbridled right to exercise the full number of statutory peremptory challenges was violated. See Johnson, 43 S.W.3d at 8 (Keller, P.J., concurring). At that point the trial court could have examined appellant’s strike list, reconsidered denial of the challenge for cause, and granted the request for another peremptory strike. See id. at 8, 9 (“Courts should err on the side of granting for cause challenges, not on denying them ... if the trial court gives the defendant sufficient extra peremptory challenges then the error is cured.”) By delaying his request until after the parties’ peremptory challenges had been exercised and the jury members disclosed, appellant not only failed to make his complaint known at the earliest time, but delayed making it known until a time outside that provided by statute for exercising peremptory challenges. See art. 35.25 and art. 35.26.

The conclusion follows that appellant did not timely (1) advise the trial court that he had actually used a peremptory challenge to strike Hayes and had used all his other peremptory challenges, (2) request an additional peremptory challenge and (3) identify a specific objectionable juror that he would strike if given an additional peremptory challenge. Assuming, without deciding, that the trial court erred in denying appellant’s challenge for cause, error was not preserved for review. TRAP 33.1(a)(1).

Appellant’s first issue is overruled.

ISSUE TWO: INEFFECTIVE ASSISTANCE OF COUNSEL

Appellant did not testify at either the guilt-innocence or punishment phases of trial. He sought probation by offering testimony of other witnesses at the punishment phase as to his eligibility for probation, conditions placed', on sexual offender probationers, success rates for sexual offenders placed on probation and his past probation history as shown by prior misdemeanor judgments granting probation which had been introduced by the State. Appellant points to three questions asked by the prosecutor on cross-examination of appellant’s witness Adam Puckett, a probation officer for Lubbock County, which appellant urges as the basis of his ineffective assistance claim. By those three questions the State asked about and elicited testimony to the effect that a significant relationship existed between sexual offender probationers accepting responsibility for their crimes and successful completion of probation, and that most probationers were in that status because they pled guilty and took responsibility initially. Appellant contends that this line of questioning improperly commented on his right to remain silent and his trial counsel’s failure to object denied appellant his constitutional right to remain silent. Relying on Roberson v. State, 100 S.W.3d 36 (Tex.App.-Waco 2002, pet. ref'd), appellant contends that (1) the prosecutor’s comments on responsibility were an improper reference to appellant’s failure to testify; (2) the comments were ongoing and flagrant; (3) trial counsel’s failure to object denied the judge an opportunity to instruct the jury to disregard the improper reference; (4) the improper remarks greatly affected the jurors during the punishment phase of the trial; and (5) the improper comments affected the severity of the punishment imposed by the jury. Hence, appellant contends, his trial counsel was ineffective and the violation of his constitutional right to remain silent harmed him because the jury assessed a more severe punishment than it would have assessed otherwise.

A claim of ineffective assistance of counsel requires the appellant to show that (1) counsel’s performance was so deficient that counsel was not functioning as the “counsel” guaranteed under the Sixth Amendment, and (2) counsel’s deficient performance prejudiced appellant, depriving him of a fair trial. Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). The defendant must prove by a preponderance of the evidence that there is no plausible professional reason for a specific act or omission. See Bone v. State, 77 S.W.3d 828, 836 (Tex.Crim.App.2002). Just as a criminal defendant is entitled to an opportunity to explain himself and present evidence on his behalf, defense counsel should also ordinarily be accorded an opportunity to explain his or her actions before being labeled as ineffective. Id. A record which is silent as to why appellant’s trial counsel took or failed to take certain actions is generally not adequate to establish ineffective assistance of counsel. See Rylander v. State, 101 S.W.3d 107, 111 (Tex.Crim.App.2003). An appellate court will not use speculation as to the reasons for questioned actions or omissions of counsel to overcome the strong presumption that counsel made trial decisions in the exercise of reasonable professional judgment. See Jackson v. State, 877 S.W.2d 768, 771 (Tex. Crim.App.1994); Lopez v. State, 79 S.W.3d 108, 112 (Tex.App.-Amarillo 2002, no pet.).

Appellant references no evidence of reasons for counsel’s failure to object to the State’s questions and the witness’s responses. Absent such evidence, and based on the record before us, the presumption that counsel’s actions were the product of reasonable professional judgment prevails. We will not use speculation as to counsel’s mental processes as the basis for concluding that counsel was ineffective.

Appellant has not shown that trial counsel’s performance was so deficient that appellant was not afforded the counsel guaranteed by the Sixth Amendment. His second issue is overruled.

The judgment of the trial court is affirmed.

      . Reference to a provision of the Code of Criminal Procedure hereafter will be by reference to “art. —

      . Reference to a rule of appellate procedure hereafter will be by reference to "TRAP-.”

      . Nor does it seem to us such process would accord fair treatment to the opposing party who must exercise peremptory challenges without benefit of knowing which venire members will be on the jury.

      . Of course, the record must substantiate the statement.

      . Because of our conclusion, we do not address whether appellant’s objection to the trial court’s denial of his challenge to Hayes was sufficiently specific to preserve error, nor whether, as the State contends, appellant’s appellate issue does not correspond to his trial objection. TRAP 47.1.