We said in Part I of this week’s conference recap that this Part II would cover two dissents from review denials and a bunch of grant-and-hold dispositions. That’s true, but incomplete. The court’s case summaries for this week lists a review grant that doesn’t appear on the court’s conference results list, so we report on that first.
Review granted: nonresident taxes
The court agreed to hear Garcia-Rojas v. Franchise Tax Board, which presents the issue, as summarized by court staff (see here), “Can a nonresident’s business qualify as a ‘unitary business’ for the purpose of calculating state income taxes (Cal. Code Regs, tit. 18, § 17951-4, subd. (c)) if the business is conducted as a single sole proprietorship?”
Under Revenue and Taxation Code section 17041(i)(1)(B), a non-California resident can be taxed for income “derived from sources within this state.” The cited regulation provides that California will tax “net income derived from sources within this state” when “a nonresident’s business, trade or profession is a sole proprietorship which carries on a unitary business, trade, or profession within and without the state.”
The published opinion of the First District, Division Three, Court of Appeal, concluded the income of a Texas radiologist, earned by reading and reporting from home on imaging studies collected at California medical facilities, was not taxable in this state. It found no cases that “apply the unitary business theory to a single person or sole proprietorship engaging in one business activity,” as opposed to “ ‘ “ ‘two or more business entities that are commonly owned and integrated in a way that transfers value among the affiliated entities.’ ” ’ ”
Division Three found “unconvincing” the precedential Office of Tax Appeals decision in Appeal of Bindley (Cal. OTA, May 30, 2019, No. 18032402), because the OTA there “ignored that there must be separate business activities to unite.”
Dissenting vote: mental health diversion
Justice Evans recorded a dissent from the denial of review in People v. Sacco. In a belatedly published opinion, the Second District, Division Four, affirmed the denial of a motion for mental health diversion. The superior court had found that the defendant’s mental disorder was not a significant factor in his financial crimes.
Division Four rejected arguments that the superior court applied the wrong legal standard and the court’s finding was not supported by substantial evidence. Penal Code section 1001.36(b)(2) requires a finding that the mental disorder was a significant factor “unless there is clear and convincing evidence that it was not a motivating factor, causal factor, or contributing factor to the defendant’s involvement in the alleged offense,” but Division Four said the prosecution is not required to rebut the statutory presumption by producing evidence with its opposition.
Dissenting vote: conservatorship
The court denied review in Conservatorship of R.R. over Justice Liu’s recorded dissenting vote. The Third District’s belatedly partially published opinion affirmed the reappointment of a Lanterman-Petris-Short Act conservator, rejecting arguments that (1) the superior court should have excluded, as hearsay, testimony by a medical expert about the contents of the conservatee’s medical records and (2) her current conservatorship should have automatically begun on the day her prior conservatorship expired. The Third District concluded that the hearsay issue, although seemingly meritorious, was forfeited by a failure to object and that the conservatee’s counsel was not ineffective by not objecting.
Justice Liu’s vote is unexplained, so it’s not clear which of the two issues, or both, attracted his attention. (There’s a fairly simple cure for that: When a message vote’s message is muddled.)
Grant-and-hold dispositions (see here)
The court dismissed review in 24 cases that had been holding for the July sentencing decision in People v. Espino (2026) 20 Cal.5th 57 (see here). All but four of those cases had originally been grant-and-holds for People v. Rhodius (2025) 17 Cal.5th 1050 (see here), but were converted to Espino grant-and-holds after the Rhodius decision and after Espino, which itself had been a Rhodius grant-and-hold, was un-held. (See here.)
