At the request of Zervos' lawyers, Trump's campaign agreed in March to preserve all documents it might have concerning allegations that Trump touched Zervos and nine other women inappropriately.
The decision by Justice Jennifer Schecter of the NY state court in Manhattan in favour of California restaurateur Summer Zervos, a former contestant on NBC's The Apprentice, raises the prospect that Trump might have to answer embarrassing questions in court about his behaviour towards women.
Trump had also argued that he's immune from lawsuits in state court, citing the Supremacy Clause of the U.S. Constitution.
Zervos remained quiet about the attacks but made a decision to break her silence about the attacks in October 2016, in the weeks leading up to the presidential election, after the release of the "Access Hollywood" tape in which Trump could be heard engaging in a lewd discussion about women, including forms of sexual assault. Weeks before the election, Ms. Zervos accused Mr. Trump of kissing and groping her without her permission about a decade earlier.
Zervos is seeking an apology from Trump and "at least" US$2914 ($3793) in damages.
Schecter also dismissed Kasowitz's argument that Trump's denunciations of Zervos were protected speech because they were part of the presidential campaign.
Zervos met Trump when she became a contestant on "The Apprentice" in 2005.
Since Zervos appeared on an episode of "The Apprentice", and since she accused Trump of misconduct at a press conference, she may be deemed a public figure - or at least what's known as a limited objective public figure, according to Laurence Winer, an emeritus law professor at Arizona State University.
The ruling to push forward with Zervos' case "is an important victory", Nita Chaudhary, co-founder of UltraViolet, an organization fighting sexism, said in a statement.
"No one is above the law", Justice Jennifer Schechter wrote.
Trump's attorney, Marc Kasowitz, has argued that Trump's comments were just political rhetoric, and said he will appeal the decision.
Maria Glover, a law professor at Georgetown University, said that the decision will nearly certainly go to appeal. No dice, said Schecter.
"The issue of whether a president can have rights and liabilities adjudicated in state court is likely to reach the highest court in NY, in Albany", she said. He has said she continued to attempt to contact him and seek employment even after he made the alleged unwanted sexual advances - and only turned against him after he failed to accept an invitation to her restaurant.
Former porn star Stormy Daniels said she was paid $130,000 to keep quiet about her relationship with Trump.