Legal Question in Business Law in California

How do you know you would like to be in state court? That is the first question.

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You can sue both individuals, but chances are, the person with the agreement to go to binding arbitration will file a motion or petition to compel arbitration. If the issues in the case are intertwined, the court may stay the action until the results of arbitration.

Giving advice here without knowing full particulars requires me to be a bit circumspect and just mention a few thoughts and possibilities.

First, are you going to be represented by counsel? If not, you might be better off in arbitration. Does the subject matter allow the defendant(s) to demand a jury trial? That's an added expense and procedural problem for a self-represented person. Would the matter be within a small-claims court's jurisdiction, or do you have to file in Superior Court? How soon do you want to get the procedure(s) over with? Is there an attorney-fee clause in any of the documents? Is this a contract or tort matter? What are the chances for settlement? Are the claims sufficiently alike to permit or require joinder in a single action?.....and so on. So, first you have to examine your own preferences.

As to getting things under way. The party who is entitled to arbitration may waive the arbitration if you sue in court, by filing an answer instead of a petition under Code of Civil Procedure 1281.2 to compel arbitration. Or, the party who is entitled to a court trial may decide he too would prefer arbitration. The only way to find out is to file, and/or to ask.

I would be inclined to sue both in court, and see what happens. Full knowledge of the facts and circumstances, however, might suggest a different approach.

the procedure for both the actions...viz. arbitration and law suit are distinct and you cannot club them together.