There is no place for a catfight like the outdoors!.. Seriously, a garden or something like that would be nice as a variant - for example, look at some of DWW or Festelle movies - the women are fighting outside.
Anyway, I voted "in the living room" - gives you a feeling of intimacy.
But to be honest, a location is not a great thing - some catfights from Crystal take place in ugly claustrophobic rooms, but man they're so hot because the women are fighting with such a passion!