New York (CNN) The judge overseeing the New York attorney general's lawsuit against President Donald Trump's charitable foundation suggested Thursday that she will wait until an appeals court rules on whether a sitting president can be the subject of a civil lawsuit before determining whether to dismiss the state's case.

A New York appeals court is weighing that question after a judge in a separate case allowed a defamation lawsuit against Trump brought by Summer Zervos, a former contestant on "The Apprentice," to proceed.

At issue is whether the president can be sued in state court for conduct outside his official duties. The US Supreme Court ruled in 1997 that President Bill Clinton could be subject to a federal lawsuit over such conduct, but it didn't determine that issue on the state level.

In state Supreme Court in Manhattan on Thursday, Justice Saliann Scarpulla said the appeals' court determination in the Zervos matter will affect whether the state can include Trump himself in its civil case concerning the foundation, in which the state alleges the charity violated nonprofit laws and abused its tax-free status.

But Scarpulla said that an appeals' court ruling in favor of the President wouldn't entirely nullify the attorney general's case; rather, it would likely force the office to amend its lawsuit to remove Trump himself as a defendant.

The suit, filed in June, now names as defendants the foundation, Trump and his three eldest children -- Eric, Donald Jr. and Ivanka -- all of whom sat on the charity's board. It alleges that they violated federal and state charities law with a "persistent" pattern of conduct that included unlawful coordination with the 2016 Trump presidential campaign.

The attorney general's office, led by Barbara Underwood, is seeking to dissolve the Trump Foundation and wants $2.8 million in restitution, plus additional penalties. The office is also seeking to ban Trump from serving as a director of any New York nonprofit for 10 years and to prohibit the other board members, the Trump children, from serving for one year.

The focus of the majority of Thursday's hearing was on the defendants' motion to dismiss the case, with foundation attorney Alan Futerfas concentrating on two primary factors: That the foundation funds were used for charitable purposes, rather than being spent on personal luxuries, and that there was no transaction between the foundation and Trump's presidential campaign -- a factor required by statute.

"There's no house in the Hamptons" or extravagant dinners on the ledger, Futerfas said in denying the Trumps personally benefited from the foundation. "Nothing like that," he added. "So where did the money go, your honor?"

Futerfas answered his question by pointing to an enlarged screen displaying the logos of dozens of nonprofits, including the Martha Graham Dance Company and Autism Speaks.

Iowa veterans fundraiser

The question of whether a transaction between the foundation and the campaign exists rests, both parties appeared to acknowledge, on one central episode: a nationally televised charity fundraiser for military veterans that Trump held in Des Moines, Iowa, on January 28, 2016, just ahead of the Republican caucus vote there.

The foundation received $2.8 million as a result of that event and, the lawsuit, alleges, Trump campaign staff, including his campaign manager at the time, Corey Lewandowski, then directed the disbursement of those funds for Trump's political benefit.

"At the time of that fundraiser, Mr. Trump was a presidential candidate, am I right?" the judge asked Futerfas. "Yes, he was," Futerfas replied.

"And so who directed the payment of those funds from the fundraiser?" the judge asked. She noted that in evaluating the motion to dismiss, she is required to accept the allegations in the lawsuit, including those concerning Lewandowski's involvement. Lewandowski isn't named as a defendant in the suit.

"To me, that seems like a very easy case of a related transaction," the judge said. "It is not an incidental publicity. It is someone-who-is-running-for-president-of-the-United-States type of publicity."

An assistant attorney general, however, disputed Futerfas's claims, saying the office does allege "personal enrichment" by Trump. Assistant Attorney General Yael Fuchs cited several examples from the lawsuit, including a $100,000 payment from the charity that was used to settle legal claims against Trump's Mar-a-Lago resort.

As for the Iowa event, Fuchs said the Trumps were "completely conflating the identity of the foundation with the identity of the campaign -- just really usurping it for the purposes of the campaign."

"They say that the foundation was a passive recipient of the transactions," she said. "To use the modern parlance, that's not a thing," Fuchs added, drawing laughter from the courtroom.

The judge, attempting to bring clarity to the question of whether a "transaction" occurred between the foundation and the campaign, asked: "There's no check from the foundation to Donald J. Trump for President, correct?"

"Correct," Fuchs acknowledged, but pointed out that the campaign had control over the foundation's transactions, and made them for the express political benefit of Trump.

Noting email exchanges between Lewandowski and Trump Organization Chief Financial Officer Allen Weisselberg that were included in the lawsuit, Fuchs stressed that Weisselberg, who was also the foundation's treasurer, explicitly ceded control of the disbursements to Lewandowski.

Said Fuchs: "The timing and the manner of the distribution was controlled by the campaign for the benefit of Mr. Trump the candidate."

Weisselberg, who was deposed by the attorney general's office as part of its lawsuit, was also a key figure in federal prosecutors' case against former Trump attorney Michael Cohen, who pleaded guilty in August to charges including tax fraud. Weisselberg received immunity in that investigation, CNN has reported.

Though the foundation attorney, Futerfas, in the final minutes of the hearing attempted to argue a point he made in court filings alleging political bias on the part of the attorney general's office, which is now and has for years been headed by a Democrat, the judge quickly curbed that effort.

"I don't want to get involved in that," she said. "The allegations are what they are."