Capuzzi flagged 67 absentee ballots from the nursing home after questioning signatures on the ballot envelopes. Six of the ballots later were approved.
Only the 14 residents who appealed the decision will have their ballots opened and counted.
Cronin denied the request to charge Capuzzi with any legal costs of the challenge.
Calls to Capuzzi and his attorney, J. Michael Sheridan, were not immediately returned.
"The poll watcher issued a challenge without a shred of evidence that there was any misconduct," said John F. Rooney V, the attorney representing the residents.
"The nursing home is glad that the appeals ran their course," said David Porter, attorney for the nursing facility. "It is pleased that its residents' votes will be counted."
The case is still under review by the district attorney's Special Prosecution Unit, according to spokeswoman Emily Harris.
At issue is whether the residents themselves filled out the ballots.
The initial hearing on the case was held on Veterans Day, when the courthouse and government center were closed to the public. None of the elderly residents were told of the hearing, and the proceedings were not taped or recorded and no transcript was available.
"We're extremely pleased that the court has rejected this attempt at voter suppression," said David Landau, chairman of the Delaware County Democratic Party.
"Whatever the old ways are, they are done," said Landau, referring to the lock the GOP has had on county elections and government. For the most recent election, registered Democrats outnumbered Republicans in the county for the first time.