In Re Webb, 470 B.R. 439

Polster and Eisenberg appealed a February 4, 2011 sanctions order imposing $4405.23 for willful stay violation linked to a state foreclosure to Barkston Drive property.
Debtor Jonathan Webb acquired the Barkston Property via quitclaim from Beverly Webb after a pre-petition state foreclosure action was commenced by the Polsters in 2003.
Foreclosure proceedings continued post-petition; the bankruptcy court had enjoined the sheriff's sale in July 2007 and found Polster and Eisenberg in contempt for continuing state foreclosure despite notice of Webb's bankruptcy.
Appellants argued lis pendens under Ohio Revised Code 2703.26 shielded the Barkston Property from becoming estate property and from the stay; they sought an evidentiary hearing on damages.
Bankruptcy court held the Barkston Property was property of the estate under 11 U.S.C. § 541(a) and protected by § 362(a); continued foreclosure violated the stay, supporting sanctions.
Panel affirmed sanctions; award limited to Debtor’s documented attorney’s fees and costs incurred June 20–August 16, 2007; no evidentiary hearing deemed necessary given undisputed facts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does lis pendens defeat property of the estate?	Polster/Eisenberg: Barkston not estate due to lis pendens under § 2703.26.	Webb: Property became estate; lis pendens does not exempt from estate or stay.	Lis pendens does not defeat estate status; Barkston was estate property protected by the stay.
Was the stay violation willful and damages proper without an evidentiary hearing?	Polster/Eisenberg: due process requires an evidentiary hearing on damages/willfulness.	Webb: undisputed facts; hearing unnecessary; fee certification sufficient.	Court did not abuse discretion; willful violation proven; damages awarded use certified fees.
Did failure to hear before sanctions violate due process?	Polster/Eisenberg: right to record-based hearing before sanctions.	Webb: due process satisfied by notice and opportunity to respond; full evidentiary hearing not required.	No due process violation; discretion to deny an evidentiary hearing was proper.

In re Knightsbridge Dev. Co., Inc., 884 F.2d 145 (4th Cir. 1989) (lis pendens affects property interests but does not defeat estate.)
In re Periandri (Treinish v. Norwest Bank, Minn., N.A.), 266 B.R. 651 (6th Cir. BAP 2001) (lis pendens preserves plaintiff's interests while property may be estate; supports dual findings here.)
In re Ochmanek, 266 B.R. 114 (Bankr. N.D. Ohio 1999) (analyzed lis pendens; distinguished lack of stay/estate scope from lien avoidance; not authority for this result.)