Should I wait for the chargeback dispute to end before filing a small claims case?

Nothing stops you filing while a dispute is open, but doing it creates a problem you will have to unwind. A court awards you the loss you actually carry. If the bank later resolves the dispute in your favour and restores the funds, the loss you pleaded no longer exists, and you are left withdrawing the claim or amending the figure downward in front of a judge who now has reason to look harder at the rest of your numbers. Worse, you will have burned one of the two annual filings above $2,500 that California permits, with no way to reclaim it.

The sequence that works is to exhaust the fast, free route first and file for the residue. Submit your representment through the processor, wait for the final answer, then compute what is genuinely outstanding: the unrecovered room revenue, plus the chargeback fee your acquirer debited, which usually sticks to you regardless of who wins. That figure is stable, defensible and easy to present on one page. It also arrives with a story a judge finds credible, which is that you tried the ordinary commercial remedy before asking the court for anything.