U.S. Bankruptcy Judge Samuel Bufford ruled that Mr. Marshall's younger son, E. Pierce Marshall, had deprived Ms. Smith "of her expectancy of an inheritance."
E. Pierce Marshall called the ruling a "miscarriage of justice."
The decision will also result in punitive damages for Ms. Smith, said her attorney, Philip Boesch Jr.
Ms. Smith, her attorney said, was "very pleased" and believes the ruling "puts the matter to rest." The amount Ms. Smith may receive, however, is still unclear because of a pending Texas dispute over the validity of the elder Mr. Marshall's will.
Judge Bufford's decision came just a day before opening arguments begin in a trial in Houston probate court. The elder Mr. Marshall's will left all of his estate to Pierce Marshall, his younger son.
Ms. Smith â€“ who is joined by the oilman's older son, J. Howard Marshall III, in the case against Pierce Marshall â€“ testified last year that Pierce Marshall defrauded her of between $556 million and $820 million that she was entitled to as her share of her late husband's estate.
The former Playboy and Guess jeans model was working at a Houston topless bar when she met Mr. Marshall. They were married in 1994, when she was 26 and he was 89. He died the next year.
Ms. Smith, who uses her married name of Vickie Lynn Marshall in court documents, contends that her husband wanted her to have half of his estate, contrary to what his will said.
Judge Bufford ruled that Ms. Smith's expected inheritance was based on her "widow's election," or right to elect against her husband's will.
In a written statement Wednesday, Pierce Marshall called the decision "a miscarriage of justice that is not supported by the facts and will not stand up on appeal."
"We are confident that a Texas jury that is permitted to evaluate all of the evidence in the case will allow my father's clearly stated wishes to be carried out," he said, adding that he would appeal Judge Bufford's decision.
The California case arose after Pierce Marshall won a libel suit against Ms. Smith and her lawyer. The lawyer settled, but Ms. Smith filed for bankruptcy in 1996, and Mr. Marshall lodged a claim in that case.
In the Texas probate court case, Ms. Smith and J. Howard Marshall III insist that the elder Marshall promised them a share of his fortune.
J. Howard Marshall II's wealth consisted mostly of Koch Industries stock that was worth an estimated $1.4 billion when he died. During their marriage, its value rose by $449.7 million, the amount of Wednesday's judgment.