Legal Question in Civil Litigation in California

You might be able to sue in California, but whether you can will depend upon additional facts about the agreement and the surrounding circumstances. Just knowing where the two of you live is not enough to answer your question.

You are going to have some jurisdictional problems if you sue in small claims court in California. Although limited and unlimited civil cases are governed by California's liberal long arm statute regarding service, small claims is governed by a more restrictive statute.

"Service shall be made within this state, except as provided in subdivisions (f) and (g)." (Code of Civ. Proc., sect. 116.340.)

Subdivision (f) allows service on an owner of record of real property in California, who resides out of state, if the claim relates to that property.

Subdivision (g) allows service ona nonresident owner or operator of a motor vehicle involved in an accident in California.

Your situation does not fall under either of those two exceptions.

You're going to have to go to Arizona. You MIGHT technically be able to get CA jurisdicition, but it will cost you more trying to enforce a questionable judgement than to just go do it in AZ.