By order of the Bank ruptcy Appe llate Panel, the prec edential effec t of t his de c isi on is l im ite d to thec as e an d p ar tie s p ur su an t to 6th C i r
. B A P L B R 8 0 1 3 -1 (b). S

ee a l s o 6 th C i r
. B

A P L B R 8 0 1 0 -1 (c).
F ile Nam e: 12b0005n.06
BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT
I n re: J ONA THA N M . W EBB ,

Debtor.

______________________________________ ) ) ) ) No. 11-8016

Appea l from the United States B ankruptc y Court for the Norther

n District of Ohio, Easte rn Division, at Cleveland

. Ba nkruptcy Case No. 07-13703 Arg ued : Fe bruar

y 7, 2012
Dec ided and F iled: April 9, 2012
B e fo re : EM ERS ON , F UL TO N, a nd PRE STO N , B a nk

ru ptc y Ap pe llate Pane l Judg e s.

____________________ CO UN SEL
ARG UED: Har

vey S. Morrison, Cleveland, Ohio, for Appellants. Ke nneth J . Fr eema n, Cleveland, Ohio, for Appe llee. O N B RI E F: Ha rv e y S. M or ri so n, Cle ve land , O hio , f

or Ap pe lla nts . K e nn e th J . Fr eema n, Cleveland, Ohio, for

Appellee

.

____________________ OP IN ION

____________________ C. KATHRYN PRE S T ON , Ba n kru p t cy Ap p el l at e P an el J u d ge. T h e ap p el l an t s in this m atter, Marily n Polst er a

nd Richard D. E i s enber g (collec tively “the Appe llants”), appe al an or der of the bankruptc y

court e ntere d Fe bruar

y 4, 2011 (the “ Sanctions Order ”), imposing sanct io ns ag ainst them in the amount of $4405.23 for their willful violation of the automatic stay

. The sanctions are based- 2-

on an ea rlier or der in which the bankruptc y court found the Appellants in c ontempt for continuing to prosecute a state- court for eclosure action ag ainst the Debtor’ s residenc e post-petition.

F or the re a so ns that f

oll ow , w e a ff

ir m th e or de r o f t

he ba nk ru ptc y c ourt

.

I. ISSU ES ON AP P EAL
The issues pre sented in this appea l are (1) whe ther the doc trine of lis pe nd e ns prec luded the subject pro p e rty

from bec oming pa

rt of the De btor’s bankr

uptcy estate suc h that the bankr

uptcy court should n o t h av e fo und the Appellants in conte mpt or imposed sanctions, and (2) whether the ba nk ru ptc y c ourt ’s fa ilure to c on du c t an e vid e nti a ry he a ri ngon

the iss ue of

dama g e s p ri or

to

awa rd ingsanc tio ns re su lte d in a de nia l of du e pr oc e ss t o th e Ap pe lla nts

.

II. JU RI SDI CT ION AND STANDARD OF RE VI EW

The B ankruptc y

Appellate Pane l of the S ix th Circuit (the “Panel”) has jurisdiction to decide thi s app e a l. T he Un ite d St a te s D istri c t Co ur t f or the No rt he rn Di str ic t of

Oh io h a s a

uth or ize d a

pp e a ls to t he Pane l and no pa

rt y ha s tim e ly e le c te d to have thi s a pp e a l he a rd

by the dis tr ic t c ourt . 2 8 U .S. C. § 1 58 (b )( 6) , ( c )( 1) . A final ord er of the ba nk ru ptc y c ourt may be a pp e a le d a s o f r ig ht p ur su a nt t o 28 U.S.C. § 158(a) (1). For purposes of appea l, a final order “ends the litigation on the mer its and l ea v es nothing for the c ourt to do but ex ecute the judg ment.” M id la n d A s p h a lt Co r p . v. United States , 489 U.S. 794, 798, 109 S. C t. 1494, 1497 (1989) (c itations omi tted).
Although the bankruptc y

court in this c ase orig inally found the Appellants in conte mpt on J uly 20, 2007, that order

was not final until the sanc ti ons were imposed on Fe bruar y 4, 2011. W ic he ff v . B au mg

ar t ( In re W ic he ff ), 2 1 5 B. R

. 8 3 9 , 8 4 3 (B

. A. P

. 6 t h C i r. 1 9 9 8 ) ( ci t i n g U.S. Abateme nt Corp. v. Mobil Exploration & Producing U.S., Inc

. ( In re U.S. A batement Corp. ), 39 F.3d 563, 567 (5th Cir. 1994) (“Acivil contempt order is final when ‘ (1) a

finding of contempt is issued, and (2) a sanction is imposed.’ ”) ). Consequently , the S an ct i o n s Order completely

resolved the contempt iss ue s b e tw e e n th e pa

rt ie s and ma de the or de r o f c on te mpt , a s w e ll a s th e imp os iti on of sa nc tio ns , final and a

ppeala ble. U.S. Abateme nt Corp. , 3 9 F .3 d at 56 7; se e als o M ue lle r v . H

all ( In re Park

er ),- 3-

2007 WL 1376081, at *1 (B .A.P. 6th Ci r. 2007). The notice of ap p ea l fi l ed by the Appellants on F e b r u ar y 1 4 , 2 0 1 1 , w a s , t h e r e f

o r e , t i m e l y.

“The sanction or r emedy

imposed by the bankr

uptcy court for violation of the automatic stay is reviewe d for a

n abuse of

discretion.” Transouth Fi n’l Corp. v. Sharon ( In re Sharon ), 23 4 B .R. 6 7 6 , 6 7 9 (B

. A. P

. 6 t h C i r
. 1 9 9 9 ) ( ci t i n g Un ite d S tat es v . M ath e ws ( In re Ma the ws ), 209 B .R. 218 (B .A.P. 6th Ci r. 1997)) . “An a buse of discr etion occu rs only when the [trial] court relies upon clea rly err oneous finding s of fa ct or whe n it improperly applies the lawor uses a

n err oneous leg al standard.” Kay e v . A gr ipo ol, SR L ( In re M urray, Inc

. ) , 392 B.R. 288 (B .A.P. 6th Ci r. 2008). Unde r thi s st and ard , th e ba

nk ru ptc y c ourt ’s de c isi on

wi ll o nly

be dis tur

be d if it “ re lie d u

po n c le a rl y
err oneous finding s of fa ct, i m proper ly applied the g overninglaw, or use d an er roneous leg al standard.” Elec. W

orkers Pe nsion Trust Fund of Local Union # 58, IBEW

v. Gary ’s Elec . Serv. Co. , 3 4 0 F. 3 d 3 7 3 , 3 7 8 (6 t h C i r. 2 0 0 3 ) ( ci t i n g Bl ue Cro ss & Bl ue Sh ie ld Mu t. v. Bl ue Cro ss & Bl ue Sh ie ld Ass’n , 1 10 F .3 d 3 18 , 3 22 (6 th C ir . 1 99 7) ); s e e a l s o M a y o r a n d C i t yC o u n c i l o f B a l t i m o r e, M

d

. v
. W. Va. ( In re Eagle -Piche r Indus., Inc. ), 28 5 F .3 d 5 22 , 5 29 (6 th Cir . 200 2) (“ An a bu se of dis c re tio n is def in e d a s a ‘ d e f

in it e a n d f

ir m c o n v ic ti o n th a t th e [c o u rt b e lo w ] c o mm itte d a c le a r e rror of judgme nt.’”) “The question is not how t he reviewing court would have ruled, but rathe r whe ther a

re a so na ble pe rs on

c ou ld a g re e wi th t

he ba nk ru ptc y c ourt ’s de c isi on ; if

re a so na ble pe rs on s c ou ld differ as to the issue, then ther e is no abuse of discretion.” Barlow v. M.J. W aterman & Assocs. Inc

. ( In re M .J. W aterman & Assocs., Inc

. ), 227 F .3d 604, 608 (6th Cir. 2000).

III . F AC TS
Although the proce dural history of t his case is long and s omewhat confusing , the fa cts are

e s s e n t i a l l y

u n d i s p u t e d

. O n Jun e 1 3 , 2 0 0 3 , M a r i l y n P o l s t e r an d E dw a r d P o l s t e r ( c o l le c tiv e ly “Polsters”), obta ined a state court judg ment ag ainst the debtor, J onathan M. Webb (“D ebtor” ), and his mother, Be verly

J . Webb, jointl y

and seve rally , in the amount of $10,000. On J une 20, 2003, the Polst ers f iled a ce rtificate of judg ment in the county rec ord s , there by

obtaining a

judgme nt lien ag ainst rea l estate located at 902 Ba rkston Drive, Highla

nd Heig hts, Ohio (“B arkston Proper ty ”) f or the jud g me nt a

mou nt. At the tim e the l ien attac he d, the B a rk sto n Pr op e rt y wa s ti tle d s ole ly

in Be verly Webb’s name.At the t ime of t he initial hear ing in the ba nkruptcy court, the A

ppellants’ counse l informed 1 the cour t that Edward Polster wa s dece ased. A s a re sult, the orders in t h e bankr uptcy court we re i s s u edo n l y

aga i n s tM ar i l y

n P o l s t er an d h er at t o rn ey , R i ch ar d

D. E i s en b er g. There is nothing in the re cord or in the brief

s i n t h i s appeal which indicate s whether the 2 Polst ers a sked Eisenbe rg to reset the she riff’ s sale in state court or if Eisenber g undertook that a ction on his own. Reg ardle ss, the Appellants admit rec eiving notice of the Debtor’ s bankruptcy case . See note 5 infra

for f urther disc ussion of this is sue.

- 4- Th e Pol ste rs c omm e nc e d an a c tio n to for e c los e the jud g me nt l ie n o n th e B a rk sto n Pr op e rt y on September 12, 2003, a nd Be verl y W ebb wa s serve d with proce ss on September 24, 2003. On Aug ust 9, 2006, Beve rly

Webb transfe rre d the B arkston Proper ty to the Debtor by

Quitclaim deed. A Sheriff ’s sale w as set for

May 21, 2007; however , the Debtor filed his chapte r 13 petition for bankruptc y

relief that same da

y and the sa le was c ance lled.

Th e De bto r l ist e d th e P ols te rs ’ j ud g me nt l ie n o n Sc he du le D a nd lis te d th e Pol ste rs on

his mailing matr ix . The Polsters wer e ser ved with notice of

the Debtor ’s § 341 meeting of cr editors by first class ma il o n Ju n e 1 0 , 2 0 0 7

. O n Ju ly 5 , 2 0 0 7 , th e y

w e r e s e r v e d w it h a c o p y o f th e D e btor’s proposed c hapter

13 plan which pr ovided for pa y ment of the Polsters’ lien in full. The Polsters do

n o td en y h av i n g n o t i ce o f t h e D eb t o r’ s b an kru p t cy fi l i n g.
At some point after

the Debtor

filed his bankruptc y

petition, Marily

n Polst er’ s (“Polster”) attorney , Richard D. E isenberg (“Eise nberg ”), filed a motion with the state cour t to reset the 1 Sheriff’ s sale of the Ba

rkston Property

. Eisenber g filed the motion without seeking or obt aining relief from automatic sta

y . The De btor’s attorne y sent a l et t er to Eisenbergon J une 22, 2007, notify ing him that moving to have the sa le re set violated the a utomatic stay . On J uly

13, 2007, the Debtor r ece ived notice that the Sher iff’s sa le had be en re set for July 23, 2007.

On July 17 , 2 00 7, the De bto r f

ile d a n e me rg e nc y

mot ion re qu e sti ng the ba nk ru ptc y c ourt to hold Pols ter a

nd Eisenber g in c ontempt f or violating the automatic stay and for an orde r enjoining the Sheriff

’s sale ( “Contempt Motion”). The De btor asked the bankruptc y court to impose $2500 2 in c ompensatory damag es, $1925 in attorney s fee s and $12,500 in punitive d am age s as s anctions ag ainst the Appellants for their violation of the automatic sta y . I n support of his reque st for $1925Terminal Tow er is a la ndmark sky scra

per in downtown Cleve land, Ohio. 3

- 5- in attorney s fee s, the Debtor attache d an itemized billi ng statement fr om his attorney for a ll services rende red a s of J uly

17, 2007.

Webb filed a notice of hea ring on J uly 17, 2007, which stated that a hear ing on his Contempt Motion would be held on J uly 19, 2007 (the “ Contempt Hearing ”). A ccor ding to the c ertificate of service , this noti ce w as serve d on the Appellants. The A ppellants filed a r esponse to the De btor’s Con te mpt Mo tio n, in wh ic h the y

a lle g e d th e a

uto ma tic sta

y did no t a pp ly to t he B a rk sto n Pr op e rt

y b ec au s e the Bar

kston Property

was not prope rty

of the e state by

virtue of the O hio li

s p e ndens statute.
The Appe llants seemed to vac illate betwee n two main theories to support their positi on that the B arkston Proper

ty was not prope rty

of the e state. First, the Appellants a rg ued that bec ause the Polst ers ha d alre ady

rec orded the ir lien ag ainst the proper ty and commenced the fore closure a ction, Be verly Webb had no intere st in the Bar kston P ro p er t y

at the time she c onvey ed it to the Debtor. Consequently , acc ording to the Appellants, the De btor had no interest in the prope rty when he filed his bankruptcy

petition: [Bever ly Webb] could only

convey that which she ha d. As o f the date of tra nsfer , under the rule of lis pe nd

e ns the P olster l ien was a

bsolute and a third pa

rty could not acqu ir e a su peri or i nt eres t an d t oo k s ub jec t t o i t. § 27 03 .2 6 Oh io Re vi sed Co de. By analog y , if Mrs. W ebb had convey ed the Terminal Tower to the Debtor , it would be 3 a s mu c h a pa

rt of the ba

nk ru ptc y e state a s the int e re st p re se ntl y be ing fo re c los e d in the Cuy ahog a Common Pl eas Court.
“Mem. Contra to the Eme rgenc y Mot. of J onathan M. Webb for Orde r of Contempt and F urther Or de rs ” a t 3, B a nk

r. Ca se No . 0 7- 13 70 3, ECF No . 2 4; see also J uly 19, 2007 Tr. of Contempt Hr’g

a t 14 , B ank

r. Ca se No . 0 7- 13 70 3, ECF No . 1 15 . T he Ap pell a nts the n s e e me d to a ba nd on thi s
argume nt a

nd ins te a d a sse rt e d th a t, r e g a rd le ss o f w he the r t he de bto r h a d a

ny le g a l or e qu ita ble interest i n t h e property , the doctrine of lis pendens prohibited the prope rty from bec oming pa

rt of the bankr uptcy estate:Al tho ug h th e Ap pe lla nts have ne ve r r a ise d t he iss ue of wh e the r t

he Pol ste rs c a n b e he ld 4 jointly l i ab l e wi t h Eisenber g under § 362( k), there is authority for suc h share d liability . Under “g ener al principles of age ncy law .

. . a creditor-pr incipal is liable under § 362( k) for the ac ts of an

- 6- Your Honor , on October 4th, 2000, J udg e Speer ruled in t h e ca s e of [ In re Ochmane k , 2 66 B .R. 11 4 (Bankr. N. D. Oh io 2 00 0) ] that lis pendens prec luded an asset fr om coming into the ba nkruptcy case
. J uly 19, 2007 Tr. of Contempt Hr’ g at 17, B ankr. Case No. 07-13703, ECF No. 115.

Th e Ap pe lla

nts c lo sed the ir

re sp on se wi th t

he ba re state me nt: “ AN EVIDENTIARY HEA RI NG IS R EQU ESTED .” Despite this re quest, the Appe llants failed to make a ny alleg ation as to how such a

hear ing w ould aid t he bankr uptcy court in its decision nor did they set forth a

ny leg al support for the ir reque st.

Th e b an k ru p tcy

court disagree d with the Appellants’ a rg uments and conc luded that there

wer e no provisions in the Bankruptcy Code, under e ither § 362(b) or § 541(b) or (c )(2) , which

ex cepte d proper

ty subject to lis pendens from prope rty of the e state or f

rom the protec tions of the automatic stay

. Respondents [si c] arg ument is not well-premised. The only case cited by R es p o ndents, In re Oc hmanek, 2 6 6 B

. R. 1 1 4 ( B a n kr
. N

. D

. O h io 1 9 9 9 ) , did not addre ss the issue of whe ther prope rty subject to a lis pendens b e c o me s p r operty of a debtor ’s estate . I nstead, t h at ca s e i n volved a motion of the de btors to avoid a judgme nt lie n p u rs u an t t o 11 U.S.C. § 522(f) on the ba sis that the judgment lien impaired their homestead e x emption. The cour t applied the doctr ine of lis pendens and dete rmined that a mortg ag e intere st, which h ad been r ecor ded af ter the lis pendens an d start of the f orec losure ac tion by

the judg ment cre ditor, did not take priority over the judgme nt cre ditor’s lien. Id. at 123. Ther e wa s no indication by the c ourt that th e a uto ma tic sta

y wa s ina pp lic a ble be c a us e the pr op e rt

y wa s n ot p ro pe rt

y of the e state. He re in, the De bto r doe s not dis pu te that he too k ti tle to t he B a rk sto n Pr op e rt

y subject to Respondent Polster’s judg ment lie n
. I n fac t, Debtor’s pr oposed plan includes pay

ment to Respondent Polst er. H oweve r, t he fact t hat the De btor took the pr op e rt y su bje c t to the jud g me nt l ie n, do e s no t a ff e c t wh e the r t

he B a rk sto n Pr op e rt

y is property

of the De btor’s estate

. “Mem. Op. and Order” at 4, B ankr. Case No. 07-13703, ECF No. 26. The ba nkruptcy court issued

a memora ndum opinion and order on J uly 20, 2007, g ranting the Debtor ’s motion and finding the Appellants in contempt for proce eding with the state court forec losure sale (“Contempt Orde r”)

. 4a g e nt [i .e ., a n atto rn e y ] wh o w ill fu lly vio la te s th e a

uto ma tic sta

y take n whe n thos e a c ts a re wi thi n the scope of t heir principal-ag ent re lationship.” Theokary v . Abbatiello ( In re The ok

ar y ), 44 4 B .R. 30 6, 32 3- 24 (B a nk

r. E. D. Pa . 2 01 1) (c oll e c tin g c a se s) ; Haile v. N.Y

. State Higher Educ. Se rvs. Corp. , 90 B .R. 51 , 55 (W. D. N. Y. 19 88 ); In re W aswick , 2 12 B .R. 35 0, 35 2 ( B a nk r. N. D. I nd . 1 99 7) ; see also In re Johnson , 253 B.R. 857, 861 (B ankr. S.D. Ohio 2000) ( “Courts have i m p o s ed joint and sever al liability

ag ainst cre ditors and their c ounsel for w illful stay violations.”).
B e c a us e of a de lay in d e liv e ry

of the ba nk ru ptc y c ourt ’s Con te mpt

Or de r t o th e state c ourt , 5 the fore closure sale schedule d for J uly 23, 2007, went forwa rd. Upon lear

ning of this sale , Eisenber g filed a motion in state court to se t aside the for eclosure sale a nd the state c ourt subsequently did so.

- 7- The ba nkruptcy court a lso enjoined the Sheriff ’s sale sc heduled f

or Jul y 23, 2007, and issued a

5 separ ate or der f

or the Appellants to a

ppear and show cause why they should not be sanctioned f or violating the a

utomatic stay

(“Show Cause Orde r”)

.

On J uly 23, 2007, the Appellants filed a motion for rec onsideration of the Contempt Order “to the extent that the Court f ound [P olster and Eisenber g ] i ntentionally and willfully

violated the stay provisions of 11 U.S.C. § 362.” The Appellants also rene wed their reque st f or an e videntiary he ari ngon

the iss ue of

the ir a lle g e d “ sta

y vio la tio n a

nd su sc e pti bil ity

to s a nc tio ns .” Th e y did

no t, howeve r, see k rec onsideration of that portion of the orde r enjoining the sheriff ’s sale be cause they had already asked the sheriff to canc el t he sale . The Appe llants stated that they believed “ that a bona fi de qu e sti on

e xists a s to the a

pp lic a ble law g ov e rn ingthe un der lyingfa c t si tuatio n w hic h w ou ld impact upon the question of stay violation and susceptibility to sa nctions.” B eca

use the ba nkruptcy “[c]ourt swore in no witnesses and took no e vidence , althoug h an evide n t iary hear ing ha d been

re qu e ste d, ” the Ap pe lla

nts a sse rt e d the y we re e nti tle d to an ev ide nti a ry he a ri ngon the iss ue of

the ir alleg ed violation of the stay

.

The De btor filed a response to the motion for r econside ration, in which he alleg ed that the Appellants had not de monstrated a n y ca u se under Fe dera l Rule of Civil Procedur e 59(e ) for

rec onsideration of the bankruptc y court’s order

. The bankruptc y court c onducted a

hear ing on the motion to reconsider a

nd the Debtor ’s re sponse there to on Aug ust 16, 2007.

On Se pte mbe r 2 4, 20 07 , th e ba nk ru ptc y c ourt e nte re d a

n order de nyingthe Ap pe lla nts ’ motion for rec onsideration:- 8-

Movants [si c] reque st for reconsider ation is not well-pre mised. The fa cts underly ing the Debtor ’s Motion to enjoin the sale of his home and fi n d M o v ants in contempt wer e not in dispute. Movant s d i d n o t dispute that they had notice of

the Debtor ’s filing but c ontinued to pr osecute the state for eclosure action. In fac t, at the hea ring on the Debtor ’s M o t i o n t o enjoin the sale, Mova nts justi fied their c ontinued p ro s ec ution based on their be lief that the De btor’s per sonal reside nce w as not pr op e rt y of the e state . A n ev ide nti a ry he a ri ngwo uld

no t ha ve a ssi ste d th e Court

in deciding the Debtor ’s Motion to enjoin the sale of his home. Se e So c ial ist W or k e rs Party v. I llinois State Bd. of Elections , 566 F.2d 586, 587 ( 7th Cir. 1977) (whe re nothing in the of

fer o f proof, if pr oved, would have altere d the re sult, the district court did not abuse its discre tion in gra nting a preliminary

injuncti o n wi thout an evidentiar y hear ing.)
“Memo.of O p. and Or der” at 3, B ankr. Case No. 07-13703, ECF No. 59.
On Aug ust 21, 2007, the Debtor filed a re sponse to the Show Cause Or der in whic h he

a me nd e d h is r e qu e st f

or sanc tio ns to d e le te the $2 50 0 in c omp e ns a tor y dama g e s and

$1 2, 50 0 in punitive da

mag es and to a

mend his r equest for attorney s fee s from $1925 to $4405.23. This amount consisted of attorney ’s fee s and costs from J une 20 throug h Aug ust 16, 2007. The De btor attac hed an itemized statement of attorne y ’s fe es as an ex hibit to hi s response. T he stateme nt cover ed eig hteen hour s of work at the rate of $250.00 per hour for wor k done by counsel for

the Debtor , and $175.00 per hour

for wor k done by an assoc iate. The first servic e listed on the itemized statement was dra fting of the let t er to Eisenberginforming him that resetting the Sheriff ’s sale violate d the automatic stay

. The last service listed on the statement wa s time spent prepa ring for the he aringon the Appellants’ motion for reconsider ation of the Contempt Motion. The Appellants did not object to the reque sted amount of attorne y ’s fe es or the e x hibit. All of the charg es desc ribed on the state me nt w e re fo r w or

k d on e on

the Con te mpt

Mo tio n, Sho w Ca

us e Or de r a

nd the Ap pe lla

nts ’ motion to reconsider.
Although initially

set for Aug ust 23, 2007, the Show Cause Orde r wa s continued seve ral times and ev entually

hear d on November

8, 2007. Neither

Polst er nor

Eisenber g appea

red at the he ari ng . Wh e n a sk e d w hy his c lie nts we re no t pr e se nt at th e show c a us e he a ri ng , th e Ap pe lla

nts ’ attorney stated, Your Honor , the under standing , the impression that Ihad whe n Ileft the c ourtroom on the 18th o f October

was if we had no settlement with Mr. F ree man [Debtor’sI n her obje ction to c onfirmation, Polst er alleg ed that the Debtor was attempting to hinder , 6 de lay , a nd de fr a ud Pol ste r a nd pr e ve nt h e r f

ro m r e c ov e ri ngon

he r j ud g me nt lien . Po lst e r a lso alleg ed that the Debtor was not proposing to submit all hi s disposable income to the plan a nd that the Debtor ’s sche dules did not disclose all of hi s income. The bankruptc y court ove rruled Polster’ s objection and c onfirmed the D ebtor’s pla n. Polst er’ s appea l of the orde r o verr uling he r objec tion to c onfirmation was dismiss ed by the BA P on Fe bruar y 4, 2008 (B AP c ase number 07-8 0 7 0 ) for want of pr osecution.

- 9- attorney ] t he Court would set an e videntiary hear ing. I ’m here to report ther e’s be en no settlement with Mr. Fr eema n. Nov. 8, 2007 Tr. of

Hr’gat 3, B ankr. Case No. 07-13703, ECF No. 114. Debtor’ s attorney concur red with the repr esentation that if the matter wa s not settled af t er t h e October 2007 he aringwas adjourne d, the bankruptc y court would continue it to November 8, 2007; how ever , Debtor’ s attorney fu rt he r s ta te d th a t “ [i]t wa s my re c oll e c tio n that if the ma tte r wa s no t re so lve d the n th e Court wo uld issue a ru l i n g b as ed on what had bee n filed but that [the Appellants] were still ordere d to appea r today .” Id . The ba

nkruptcy court then state d that “sanc ti o n s wi l l be issued and the Court’s order will issue in that reg ard.” Id. at 4.
Despite the ba

nkrupt cy co u rt ’s indication at the Nove mber 2007 he aringthat a sanc tions order would be issued, it wa s not until the De btor filed a motion on Octobe r 27, 2010 (“ Sanctions Mo tio n” ) t

hat th e ba nk ru ptc y c ourt too k u p th e iss ue of

the a pp ro pr ia te sanc tio ns . The Ap pe lla nts filed an obje ction to the San ct ions Motion on November 17, 2010, and a g ain re quested a n evidentiar y hear ing on the issue of the a lleg ed stay violation.

The ba nkruptcy court c onducted a

n initial hearin g o n the Debtor ’s Sanctions Motion on No ve mbe r 1 8, 20 10 . A t th a t he a ri ng , D e bto r’ s a tto rn e y state d th a t
Your Honor , this matter was orig inally schedule d and the Court had issued a n order and an or der of

sanctions was suppose d to be issued. [The Appellants’ counse l] filed an a pp e a l of the De bto r’ s o rd e r c on fi rm ingthe pla n. Th a t a

pp e a l w a s e ve ntu a lly 6 dis mis se d f

or la c k of pr os e c uti on
. Th e purp os e of thi s mo tio n w a s to br ingba c k to the Court’ s a tt e n ti o n th a t th e r e w a s a n o r d e r th a t w a s e n te r e d a n d th e matt er w as hear d and submitted. But the Cou rt never issued an orde r. And that orde r wa sn’t issued, I believe, beca

use of the appea l that was filed by [t he Appe llants’ counsel] on b eh al f o f M ar i l y

n P o l s t er an d R i ch ar d E i s en b er g.

. . .- 10-

And that appe al was dismissed for la ck of pr osecution. .

. . So there fore , Ibelieve that the Court ’s or ig ina l or de r w he re it sa id ev e ry thi ng ha d be e n h e a rd

a nd su bmi tte d is no w r ipe fo r d e c isi on , w hate ve r the Cou rt ’s de c isi on

may be wi th r e sp e c t to sanc tio ns
. Nov. 1 8 , 2010 Tr. of H r’gat 1-2, B ankr. Case No. 07-13703, ECF No. 113. At the conc lusion of that hear ing, the bankruptc y court stated it would re view the matte r an d d et ermine whether a ny further hear ing w ould be nec essa ry
. On J anuar y 6, 2011, the bankr

uptcy court re set the De btor’s Sanctions Motion to J anuar y 27, 2011.

The De btor’s attorne y

filed a certific ation on J anuar y 7, 2011, in which he c ertified that the attorney s’ fe es and e x penses in conne ction with the Contempt Moti on and the Show Cause O rder

wer e $4405.23. The Appellants did not object to the ce rtification.

At the J anuar

y 27, 2011 hear ing, the Debtor’ s attorney informed the court that he had filed

a cer tification of fee s and expenses. The Debtor’ s attorney then asked the court to issue an orde r as to the amount of sanc tions to be imposed ag ainst the Appellants. Jan. 27, 2011 Tr. of Hr ’g at 2. Counsel for the Appe llants renew ed his motion for an e videntiary hear ing. T he cour

t then took the

ma tte r u nd e r a dv ise me nt.

The ba nkruptcy court issued an order

g ranting the Debtor ’s Sanctions Motion on Febr uary 4, 2011. The b an k rupt cy court stated it had r eviewe d the ce rtification of f ees submitted by

the D e b t o r ’ s c o u n s e l a n d

f o u n d t h a tt o b e “ s u f

f i c i e n tp r o o f

o f t h e D e b t o r ’ s d a m a g e s , a n d , a c c o r d i n g l y, an evide ntiary

hear ing is unnece ssary .” B eca use the De btor had de monstrated he ha d been injure d by the Appellants’ w illful viol ation of the a utomatic stay , the bankr

uptcy court c oncluded he was entitled to rec over a ctual dama g es pursua nt to 11 U.S.C . § 362(k).
The Appe llants tim ely

filed a notice of appe al of the Sanc tions Order.Ohio Rev. Code § 2703.26 was a mended e ffe cti v e S eptember 11, 2008, to replac e 7

“ su mmo ns ha s b e e n s e rv e d o r p ub lic a tio n ma de ” wi th “ c omp la int is f iled.” Th e e ff

e c t of thi s amendment wa s to broaden the scope of the lis pendens doctrine so that the fil ing of a complaint by itself “cr eate s a ‘pe nding’ action for purposes of t h e doctrine . . . .” Be ne fic ial Oh io, In c . v . E lli

s , 902 N.E.2d 452, 456 (Ohio 2009)

.

- 11- IV . D ISC USS ION

A. 11 U.S.C. §§ 362(a) and 541(a), and Oh io Rev. Code 2703.26

The Appellants in this case have a lleg ed that the doc trine of lis pendens , as s e t f or th i n O hio Revised Code 2703.26, pre cluded the B arkston Proper ty from bec oming proper

ty of the e state under 11 U.S.C. § 541 and, there fore , the provisions of 11 U.S.C. § 362(a) did not pr o h i b i t t h em from proce eding with their state cour t forec losure on the pr operty

.
By virtue of 11 U.S.C. § 541, the filing of a ba nkruptcy petition creates a ba

nkruptcy estate. Se c tio n 5 41 (a ) o f t

he B a nk ru ptc y Cod e de fi ne s “ pr op e rt

y of the e state ” a s “ a ll l e g a l or e qu ita ble interests of the de btor in proper ty as of t h e co m m en ceme nt of the ca se.” 11 U.S.C. § 541(a)(1)

. “This def inition i s unquestionably broad, its main purpose being to bring any thing of value that the debtors have into the [bankruptc y ] estate.” Lyon v. Eiseman ( In re Forbes ), 37 2 B .R. 32 1 ( B .A .P. 6 t h C i r. 2 0 0 7 ) (i n t ern al qu o t at i o n m ar k s an d ci t at i o n o m i t t ed ). Al t h o u gh i t s s co p e i s fa r- re ac h i n g, § 541(a) does not work to expan d the debtor’ s interest in the prope rty . “Whatever rig hts a debtor ha d a t th e c o mm e n c e me n t o f th e c a s e c o n ti n u e in to b a n kr u p tc y - n o mo r e , n o le s s.” French v

. Johnson ( In re Coome r ), 3 7 5 B. R

. 8 0 0 , 8 0 4 (B an k r. N. D. Oh i o 2 0 0 7 ) ( ci t i n g Mo od y v . Amo c o O il Co. , 734 F.2d 1200, 1213 ( 7th Cir. 1984)). The only interests that ar e excluded from proper ty of the estate a re f ound in 11 U.S.C. § 541(b), none of which are applicable in this case. “While fe dera l law de fi ne s w hat ty

pe s o f p ro pe rt

y c omp ri se the e state , state law g e ne ra lly de te rm ine s w hat in te re st, if any , a debtor

has in proper

ty .” O ’ D o w d v
. Tru e ge r ( In reO’ Do wd ) 233 F .3d 197, 202 (3d Cir. 20 00 ); Butner v. United States, 440 U.S. 48, 99 S. C t. 914 (1979).

Se c tio n 27 03 .2 6 of the Oh io R e vis e d Co de is t itl e d “ L is p e nd e ns in g e ne ra l” and a t th e tim e of c omm e nc e me nt o f t

his c a se , pr ov ide d th a t:

7- 12-

Whe n s umm on s h a s b e e n s e rv e d o r p ub lic a tio n ma de , the a c tio n is p e nd ingso a s to c h ar g e th ir d p e r s o n w it

h n o ti c e o f it s p e n d e n c y
. Wh il e p e n d in g , n o in te r est ca n be acquir ed by third persons in the subjec t of the ac tion, as ag ain st t he pla int iff

's ti tle

. Oh io R e v. Cod e § 2 70 3. 26 (2 00 7) (e mph a sis a dd e d)

. As the Oh io Court of Ap pe a ls re c og nize d in Cin c inn ati

e xre l. R itt e r v . Ci nc inn ati Re ds , L. L.C. , 782 N.E.2d 1225 (Ohio Ct. App. 2002):

L is pendens is a leg al doctrine —literally “a pe nding la

wsuit.” I t means that the filing of a lawsuit conce rning specific proper ty g ives notice to others of

the claim alleg ed i nt h e l a w s u i ta n d

t h a ta p u r c h a s e r

o f t h e p r o p e r

t y may take the property su bje c t to the ou tc ome of

the laws uit

. L i s p en d en s is not a substantive rig ht. I t does not cre ate a lien, but “cha

rg es the purc ha se r w ithno tic e of the pe nd ingact io n. ” I f a pp lic a ble , it does not preve nt person s f r o m tr a n s a c ti n g a n in te r e s t in th e p r o p e rty s u b je c t to li ti g a ti o n
. Any convey ed intere st, however , become s s ubject to the outcome of the pending litigation. The pur

pose of lis pende ns is to protect the plaintiff' s interest in the subjec t proper ty

. Under

the doctrine , “no intere st can be acquir ed b y t hird persons in the subject of the a ction, as ag ainst the plaintiff' s titl e.”
Id. a t 1 2 3 5 ( e mp h a s i s a d d e d ) ( f o o t n o t e s a n d c i t a t i o n s o m i t t e d )

. A l t h o u g h t h e d o c t r i n e p r e v e n t s a
su bs e qu e nt p ur c ha se r f

ro m c ha lle ng inga

c ourt ’s ult ima

te jud g me nt in litig a tio n pe nd ing a t the tim e of acquisition of t he property , it does not prevent the tr ansfe r of title during the pending lawsuit. Id .; Ba te s v . P os tul

ateIn v estm e nts , LLC

, 892 N.E.2d 937, 940 (Ohio 2008) ( “The doctrine pla ces a ny
su c h c on ve y e d in te re st at r isk a nd no tif ie s th e pa rt ie s th a t th e y

a re bo un d b y

th e decr ee and sa le the re un de r. ” (i nte rn a l qu otatio n ma rk s and c itatio ns omi tte d) ); ABN AMRO M ortg. Group, Inc. v

. Jack son , 8 24 N. E. 2d

60 0, 60 5 ( Oh io C t. A

pp . 2 00 5) ; Treinish v. Norw est Bank M inn., N.A. (

In re Pe ria nd ri ), 266 B .R. 651, 65 6 (B

. A. P. 6th C ir. 2001) (“ Thus, any prospec tive purcha ser or encumbr ance r ‘is cha

rg eable with constructive notice of the pendency of such suit, so as t o rende r h i s i n t er es t i n t h e su b

j ec to f i tl i ab l e t o i t s ev en t

. ’ ” (c i t i n g Lud lowv . Ki dd ’s Ex e c uto rs , 3 Ohio 541, 54 2 (Ohio 1 82 8) )) ; In re Se ymour , 4 4 2 B

. R. 6 5 2 , 6 5 6 ( B a n kr
. S. D

. O h io 2 0 1 0 )

. T h e inte nded purpose of

the lis pendens doctrine is to “pres er v e[] the status quo of all conf licting r ights a

nd interests in the prope rty

in question until there i s a final a djudication of the issues ra ised in the pending suit.” Cook v. Moze r , 140 N.E. 590, 592 (Ohio 1923). F ocusing on the interplay of the lis pendens doctrine a

nd fore closure actions specific ally , the doctrine does not preve nt the t ransf er of an intere st in the underlying property during the pendency of the for eclosure action. W heeling Corp. v. Columbus & Ohio River R.R. Co. , 7 71 N. E. 2d 26 3, 28 0 ( Oh io C t. A

pp . 2 00 1) . H ow e ve r, a s w ith- 13-

all pending actions, the doc trine of lis pendens pla c e s the “ c on ve y e d int e re st a t ri sk a nd su bje c t to the final outcome of the liti g ation.” Id. “In Ohio, a fore closure proce eding is c onsidered pe nding throug h the final de cre e and until the interest in the prope rty in question has been fore closed and the proper ty sold.” Seym our , 442 B.R. at 657 (internal citation omitted). I f a f orec losure ac tion has been

commence d pre- petition, but has not been completed at the time the bankruptcy petition is filed, the debtor’s interest in the prope rty become s proper

ty of the e state. Stubbins v. Slack ( In re Slack

), 394 B .R. 16 4, 16 9 (B a nk

r. S.D . O hio 20 08 ); see also Huntington Nat’l Bank v. A.K. Fiberglastics, Inc. ( In re A.K. Fiberglastics, Inc

. ), 26 B.R. 549 (B ankr. O hio 1983) (holding that proper ty on which a judgme nt of fore closure ha d been e ntere d pre- petition, but which ha d not been sold at the time the bankruptc y

case was filed w as prope rty of the e state under

§ 541).

I n addition to creating a

n estate, the filing of

a bankr uptcy petition trigg ers the pr otections of the a utomatic stay under 11 U.S.C. § 362(a)

. Section 362(a) prohibits cre ditors from attempting t o c o l l e c t m o s t d e b t s f

r o m t h e d e b t o r o r p r o p e rt y o f t h e e s t a t e
. T h e s c o p e o f t h e a u t o m a t i c s t a y

is broad a nd “[i] t stops all collection efforts, all hara ssment, and all fore closure actions.” H.R. R ep. No

. 59 5, 95 th C on g ., 1s t Se ss. 34 0 ( 19 78 ); Smith v. First Am. Bank ( In re Sm ith ), 876 F.2d 524, 526 (6th Cir. 1989). “I t is elementary that the automatic stay

comes in t o ex i s t ence automatically and immediately upon the filing of a petition in bankruptcy .” W ebb Mtn, LLC

, v. Exec. Realty P’ship, L.P. ( In re W e bb Mt n. , LLC ), 414 B.R. 308, 335 (B ankr. E.D . Tenn. 2009) ( internal quotation marks

and c itatio ns omi tte d) . T he sta y of a n a c t a g a ins t pr op e rt

y of the e state c on tin

ue s unti l th e pr op e rt

y is n o lo ng e r p ro pe rt

y of the e state . 1 1 U .S. C. § 36 2( c )( 1) . T he sta y of a ny oth e r a c t c on tin

ue s unti l the ca se is closed, dismissed, o r d ischarg ed, whiche ver is ea rliest. 11 U.S.C. § 362(c). The

comme n c e me n t o r

c o n ti n u a ti o n o f f orec losure proc eeding s or enf orce ment of a f

orec losure judg ment is specif i ca l l y prohibited by

§ 362(a)

. Hardesty v . Chase ( In re Ha rd

esty ), 442 B .R. 110, 113 (B ank r. N. D. Oh io 2 01 0) ; A.K. Fiberglastics, Inc. , 2 6 B

. R. a t 5 5 1

. T h e o n ly e xc e p ti o n s to the automatic stay

are found i n § 362(b), none of which a re a pplicable in the c ase pr esently befor e the Panel. A cr editor see king to pr ocee d with an ac tion prohibited by the automatic stay must seek re lief from the stay

pursuant to § 362(d).

I n ma kin g the ir a rgume nt t

hat th e De bto r’ s in te re st i n th e B a rk sto n Pr op e rt y did no t be c ome pr op e rt y of the ba nk ru ptc y e state , th e Ap pe lla

nts se e m to c on fu se the iss ue s o f pr op e rt y of the e state- 14-

under § 541( a) a

nd the automatic stay

under § 362 w ith the issues of lien avoidanc e under § 522(f)

and a tr us te e ’s a vo ida

nc e po we rs un de r § 54 4. I n th e ir ba nk ru ptc y c ou rt ple a din g s, the Ap pe lla

nts ci t ed the dec ision In re Oc hmanek, 2 6 6 B

. R

. 1 1 4 ( B a n kr
. N

. D

. O h i o 2 0 0 0 ) a s s u p p o rt f or the ir argument that the B arkston Proper ty was not p ro p er t y of the De btor’s estate . The Ochmane k decision contains no such hol ding. At issue in Ochmane k wa s w he the r t

he de bto rs c ou ld

a v o i d a j u d g m e n tl i e n u n d e r

§ 5 2 2 ( f ) w h i c h a l l e g e d l y

i mp a i r e d t h e i r h o m e s t e a d

e x e mp t i o n
. In defe nse of the § 522( f) a ction, the judg ment lien cre dito r as s erted that the doctrine of lis pendens preve nted the subseque nt rec ordation of a mortgag e from operating ag ainst him such t hat t here was sufficie nt equity

to defe at the debtor s’ motion. Id . at 121.

The Ochmane k court thoroug hly analy zed the doctrine of lis pendens in Ohio and conc luded that the mortg ag e compa

ny ’s intere st in the debtor’s proper ty was subjec t to the forec losure ac tion. Id. at 122. Co n s eq u en t l y , t he judg ment lien was found to be the superior lien and the c ourt concluded i t could not be avoided by the debtor. The re is nothing in the opinion which even remotely stands for the pr oposition t hat prope rty which is the subject of a pre -petition state cour t fore c lo s u r e a c ti o n d o e s n o t b e c o me p r o p e rty o f th e e s tate

. N o r d o e s th e o p in io n c o n ta in any d i s cussion at all of the a utomatic stay , let alone hold that the doc trine of lis pendens s o me h ow exti ng uishes the protec tion s afforded by § 362. The c ase simply does not offe r any

support whatsoeve r for

the Appellants’ position.

I n th e ir b r ie f in th is a

p p e a l, th e A p p e ll a n ts c it e th e B A P d e c is ion of Tre ini sh v . No rwe

st Bank, Minn., N.A. (

In re Pe ria nd

ri ), 26 6 B .R. 65 1 ( B .A .P. 6th Cir . 200 1) , an d s ta te tha t un de r t his decision “the Debtor w ould not have the status of a bona fide purcha ser.” App. B rief p. 17. A t issue in Pe ria nd

riwas whe ther the c hapter 7 trustee c ould avoid an alleg edly defe ctive mortg ag e on which a for eclosure action had be en commenc ed pre -petition. T h e m o rt gag e compa ny asser ted that, by virtue of the doc trine of lis pendens , the fore closure action provided the trustee constructive notice of the lien such that he could not obtain t h e s t atus of a hy pothetical bona f

ide purc haser

under § 544 (a )( 3)

. Th e ba

nk ru ptc y c ourt a g re e d w iththe ba

nk a nd c on c lud e d th a t th e tr

us te e c ou ld n ot u se his strong- arm powe rs to avoid the bank’ s interest. On a ppeal, the B AP affir

med.- 15-

The Pe ria nd

ricase does not ava il the Appellants, and the Appe llants’ premise, that pur suant to Pe ria nd

rithe Debtor

lacks bona

fide purc haser

status, misses the mark. The instant c ase doe s not involve avoidanc e of a

lien by a trustee or t he Debtor pursuant to § 544; the instant dispute involves the scope of the ba

nkruptcy estate and the automatic stay . Whether a de btor could attain the status of a hy pothetical bona f

ide purc haser

under § 544 ha s no impact on the question of whe ther the lis pendens doctrine pr events prope rty from being“prope rty

of the e state” unde r § 541.

I n fac t, the Pe ria nd

ri pa ne l r e c og nize d tw o k ey point s w hic h d e fe a t th e Ap pe lla nts ’ arguments in the instan t ca s e. Fi rst, the B AP emphasized the principle that the doc trine of lis pendens does not preve nt a third party from acquir ing an interest in pr operty that is the subject of a pending fore closure a ction:
A more mode rn re iteration of the [ lis pendens ] pr inc ipl e ho lds that if a thi rd pa rt y acquir es an inter est in the property while t he action is pending , that person take s the p r o p er t y s u b j ec tt o t h e f

i n al o u t co m e o f t h e a ct i o n , t h u s p ro t ec t i n g t h e p l ai n t i ff 's interest in the prope rty

at issue.
Id. at 656-57 (inter

nal citations and quotation marks omitted). Sec ond, the panel specific ally found that the prope rty

at issue was proper

ty of t he estate and that the “the bankruptc y filing trigg ere d an automatic stay

of the pe nding judicia l forec losure . . . [that continued u n t i l ] t h at p ro perty was no longe r proper

ty of the ba nkruptcy estate.” Id. a t 6 5 7 ( c i t i n g 1 1 U

. S

. C

. § 3 6 2 ( c ) ( 1 ) )

. Q u i t e s i mp l y, this decision makes clea

r (1) that a third party may acquir e an inter est in proper ty that is the subject of a pending action and ( 2) that the doc trine of lis pendens does not except the s ubject prope rty from proper ty of the e state under

§ 5 41(a) nor does it void the application of the automatic stay to the Debtors inter est in the proper ty . Until such time as the stay is terminated or modified, a ny pending fore closure a ction may

not proce ed.

I n the ca se pre sently

befor e the Pane l, it is clea r that the De btor ac quired a n intere st in the Ba rkston Property when his mother convey ed it to him on Aug ust 9, 2006. The only eff ect that the lis pendens doctrine ha d on his interest was to make his interest subject to, and bound by , the outcome of the Polst ers’ state cour t forec losure ac tion. Bates , 892 N.E.2d at 940. As l o ng as the state cour t forec losure proc eedingwas pending, Beve rly Webb was fr ee to tra nsfer her inter est in the proper ty to the Debtor. O nce the Ba rkston Property

was transfe rre d to the Debtor, he ac quired a n- 16-

interest in it which became property of hi s bankruptc y estate pursuant to 11 U.S.C. § 541(a). The only limit ation o n h is interest was that it was subjec t to the outcome in the fore closure a ction. Be cause a for eclosure sale ha d not been c ompleted at the time the ca se wa s filed, the De btor’s interest in the prope rty

beca me prope rty

of his estate unde r § 541(a ) and the conti nuation of the fo re c los ur e a c tio n w a s p ro hib ite d b y the a uto ma tic sta

y . T he ru lin g of

the ba nk ru ptc y c ourt on thi s issue clea rly did not constitut e an a

buse of its discre tion.
Although the re d o n o t appea r to be a ny case s directly

on point, a revie w of de cisions that discuss other lis pendens iss ue s r e inf or c e s th e c on c lus ion that the ba nk ru ptc y c ourt did

no t e rr in i ts deter mination that the Ba

rkston Property

was prope rty

of the e state w h i ch wa s p rot ecte d by the automatic stay . I n Savers Fe d. Sav. &Loan Assoc. v. McCarthy Constr. Co. ( In re Knightsbridge Dev . Co. ) , Inc. , 8 84 F .2 d 1 45 (4 th Cir . 198 9) , the F ourt h Ci rc uit Cou rt of Ap pe a ls a

pp lie d V ir g ini a law and c oncluded that a

post-petition amendment to a lis pendens fi le d p re -p e tit ion did no t vi olate the automatic stay beca

use it did not inter fer e with the debtor’s possession of o r c o n t ro l over proper ty of the e state nor was it an ex erc ise of control over prope rty of the e state. Id. at 147. I n By rd v. Hoffman , 4 17 B .R. 32 0 ( D. Md . 2 00 8) , th e di st ri ct court c on c lud e d th a t lis pendens notices

re su lti ngfr om state c ourt pr oc e e din g s c omm e nc e d po st- pe tit ion vio la te d the a uto ma tic sta

y be c a us e the under ly ing pr ocee ding sough t t o ex er t control over pr operty of the e state. Id. a t3 2 9

. In Thornburg v. Lynch (

In re Tho rn bu rg

), 277 B .R. 719 (Ba

nkr. E.D. Tex. 2002), the bankruptc y court conclude d that the automatic stay prec luded the post-petition f iling of a notice of lis pendens

. Id. at 73 0. Al tho ug h th e pr e c ise qu e sti on in the c ur re nt ap pe a l wa s n ot a

t is su e in t he se c a se s, inh e re nt i n
e a c h d e c isi on

wa s th e c on c lus ion

tha t th e de bto r’ s inte re st in the un de rl y ing pr op e rt y wa s p ro pe rt

y
o f t h e e s t a t e a n d

w a s p r o t e c t e d

b y t h e a u t o m a t i c s t a y.

B. The App e lla nt s’ Wil lful V iol at ion of t he Aut om at ic St ay unde r 11 U. S.C . § 36 2( k)

Continuation of forec losure proc eeding s is speci fi ca l l y prohibited by § 362(a)

. Hardesty, 442 B.R. at 113. In instances in which a fore closure sa le h as b ee n put in moti on pre- petition,

cre ditors have a

n aff irmative duty to stop the sale from continuing onc e they rec eive a ctual notice of a de btor’s bankr

uptcy filing. Id. at 114; Le d

fo r d v
. Ti e d g e ( In re Sams ), 106 B .R. 485, 490 (B ankr. S.D. Ohio 1989). “The stay require s the cr editor to maintain, or re store, the status quo as- 17-

it ex ist ed at t he time of the f iling of the bankruptc y

petition.” In re J

ohnson , 262 B.R. 831, 847 (B ank r. D. I da ho 20 01 ) ( int e rn a l qu otatio n ma rk s a nd c itatio n o mit te d) . T hu s, [I t is] i n c u mb e n t u

p o n c r e d it o r s to ta

k e th e n e c e s s a r

y s te p s to h a lt o r r e v e rse a ny pending State Court actions or other collection eff orts commence d prior to the filing of a ba nkru p t cy petition, including g arnishment of w ag es, re possession of automobile, fore closure of a mortg ag e or a judg ment lien and, ther eby , maintain, or restore , the status quo as it exi sted at the time of the filing of the bankr uptcy petition.
In re Bank

s 2 5 3 B. R

. 2 5 , 3 0 (B an kr. E

. D. M i ch

. 2 0 0 0 ) ( ci t i n g Sams , 1 0 6 a t 49 0) ; In re Johnston , 321 B.R. 262, 284 (B ankr. D . Ariz. 2005) (“The cre ditor sets in moti on the proc ess. The c reditor is very much in the driver ’s seat and very much controls what is done thereaf ter if he chooses. I f the continuation [of a pending collection ac tion] is to be stay ed, [th e cr ed i t o r] cannot choose to do nothing a nd pass the buck to the debtor.” (citation omitted))) . At most, thi s duty require s a cr editor to dismi ss a pending fore closure a ction. Fleet Mortg. Group, Inc. v . Kaneb , 196 F .3 d 2 65 , 2 69 (1 st Cir. 1999). At t h e very

least, it require s the cre ditor to inform the state cour t of the pending ba nk ru ptc y fi lin g a nd

to c a us e a ny sc he du le d sa le to be po stp on e d un til su c h tim e a s th e a uto ma tic stay is modified or terminated by the bankr

uptcy court or by

operation of law. In re Cra wfo rd , 388 B.R. 506, 523 (B ankr. S.D.N.Y . 2008).

Actions taken in violation of the a utomatic stay

are “invalid and voidable and shall be voided absent limited equitable c ircumstance s.” Easley v . Pettibone Mich. Corp., 99 0 F .2 d 90 5, 91 1 ( 6th Cir. 1993) . These limited circ umstances a rise “only wher e the de btor unrea sonably withholds noti ce of the stay

and the c reditor would be pre judiced if the de btor is able to ra ise the stay as a de fense , or wh e re the de bto r i s a tte mpt ing to us e the sta y un fa ir ly a s a sh ie ld to a

vo id a n unf a vo ra ble re su lt . . . .” Id. at 911.

S e c t i o n 3 6 2 ( k ) ( 1 ) p r o v i d e s t h a t“ a n i n d i v i d u a l i n j u r e d b y an y will

ful violation of a st ay
. . . sh a ll r e c ov e r a c tua l dam a g e s, inc lud ing c os ts an d att or ne y s' fe e s, a nd , in app ro pr ia te c ir c ums tanc e s, may rec over punitive damag es.” 11 U.S.C. § 362(k)( 1) (empha sis a dded). “A violation is willful if the cr editor deliber ately car ried out the prohibited a ct with knowledg e of the debtor' s bankruptcy

case .” In re Printup , 264 B.R. 169, 173 (B ankr. E.D. Tenn. 2001) ( internal c itations and quotation marks omitted).- 18-

A spec ific intent to violate the stay is not required, or

even a n aw areness by

the cre ditor that her c onduct violates t he st ay . I t is sufficient that the cr editor knows of the bankr uptcy and eng ag es in deliberate conduc t that, it so happen s , i s a violation of the stay . Moreove r, whe re t h ere is actual notice of the ba nkruptcy it must be pr e su me d th a t th e vio la tio n w a s d e lib e rate or int e nti on a l. Sa tis fy ing the se re qu ir e me nts its e lf c re a te s str ic t liab ili ty

. Th e re is nothin g mor e to pr ov e e xce pt d a ma g e s. In re Da nie ls , 206 B.R. 444, 445 (B ankr. E.D . Mich. 1997).

I t is ir re le va nt t o a c ourt fa c e d w ithimp os ing§ 3 62 (k ) sanc tio ns wh e the r a de fe nd a nt a c tua lly intended to violate the a

utomatic stay . I f the de fenda nt had knowledge of t he bankruptcy case and took a deliber ate a ct in violation of t he automatic stay , a bankruptcy court must awa rd the plaintiff actua l damag es, including costs and attorne y ’s fe es. In re Hi ll , 2 22 B .R. 11 9, 12 3 ( B a nk r. N. D. Oh io 1998). “[A] will ful violation of the stay can be found fr om an act of om ission and does not require

an ac t of commission.” Banks , 2 53 B .R. a t 31. Th e re fo re , if a cr e dit or ha s an a ff ir ma tiv e du ty

to h a lt a pendingstate cour

t action, fa ilure to do so can r esult in a willful violation of the stay

. Id.

A c re dit or ’s g oo d fa ith be lie f that it s in te nti on a l a c tio ns did no t vi olate the a

uto ma tic sta

y is not a defense to a § 362(k) action. Transouth Fi n’l Corp. v. Sharon ( In re Sharon ), 234 B .R. 676, 688 (B .A.P. 6th Cir. 1999). This is true even i f the c reditor’ s belief is base d on “a mistake of law or leg al dispute reg ardingits rights.” In re J ohnson , 253 B.R. 857, 861 (B ankr. S.D. Ohio 2000); Fleet Mortg. Group, I

nc. , 196 F.3d at 268- 69 (“Ag ood faith belief in a rig ht to the property

is not

re le va nt to a de te rm inatio n of wh e the r the vio la tio n wa s w ill fu l.” ); Sa ns on e v . W als wor th (

In re Sansone ), 99 B .R. 981, 987 (Ba nkr. C.D. Cal. 1989) (“Not even a ‘good faith’ mistake of l aw or a ‘leg itimate dispute’ as to leg al rig hts relieve a willful violator of the c onsequenc es of the a ct [under § 362(k)].”). A par

ty who has violated the automatic stay “ca nnot defe nd ag ainst liabilit y for a stay vio la tio n b y

c la imi nga

la c k o f c on tin

uin g ha rm . T hat is , a

c omp e ns a

ble sta y vio la tio n w ill e xist

once a resulting injury from the stay violation occurs. . . .” In re Ru sse ll , 448 B.R. 212, 216 (B ankr. N.D. Ohio 2011).
An individual seeking damag es under § 362(k) must prove, b y a pre pondera

nce of the evidenc e, that the a ctions taken we re in violati o n o f t he stay , the violation was willful and the- 19-

violation caused a ctual dama g es. Gr inev . Ch am be rs ( In re Grine ), 439 B .R. 461, 466 (B ankr. N .D. Oh i o 2 0 1 0 ). At t o rn ey ’s fe es “a re a co mp o n en t o f th e act u al d am age s re co v er ab l e un d er t h e l an gu age of § 362(k)( 1).” C o u s i n s v. Citi Financial Mortg. Co. (

In re Cousins ), 404 B .R. 281, 290 (Ba nkr. S.D. Ohio 2009). [T] he attorne y ' s fee s and costs claimed as damag es [pursuant to § 362(k)], whether pre- litigation or post-litigation, m u s t have be en proximately cause d by

and rea sonably

incurre d as a r esult of the violation of th e au t o matic stay . An awa rd of fe e s, lik e a n a wa

rd of oth e r a c tua l dama g e s un de r § 36 2( k) , mus t be proven wi th rea sonable c erta inty

and may not be spec ulative.
Grine , 4 3 9 B. R

. at 4 7 1 (c i t i n g Archer v . Macom b Cty. Bank ( In re Arc her ) , 853 F.2d 497, 499–500 (6 t h C i r. 1988)). The amount of attorney ’s fe es a pa rty seeks to re cover

under § 362( k) must be

rea sonable. In re Ru sse ll , 441 B.R. 859, 863 (B ankr. N.D. Ohio 2010). I n awa rding attorney ’s fe es under § 362( k)(1) , a cour

t should determine whe ther the f ees are rea sonable based on the “c ustomary

c omp e ns a tio n c ha

rg e d b y c omp a ra

bly sk ill e d pr a c tit ion e rs ” a nd wh e the r t he fe e s “ be a r a

re a so na ble relationship t o the amount in controve rsy .” Id .; Grine , 439 B.R. at 472 ( courts g ener ally apply the “lodestar ” method whe n deter mining the r easona

bleness of attorney ’s fe es.)
I f litigation is unnece ssary to a ffor d a complete reme dy to a debtor, the n the fe es for c omm e nc inga nd

pr os e c uti ngan a c tio n w ill fa il this sta nd a rd . O n th e oth e r h a nd , if litigation is nece ssary

to affor d a complete reme dy to a debtor unde r the pa

rticular circ u ms ta n c e s o f th e c a s e , th e r e is n o th in g in th e p la in la n g u a g e o f § 3 6 2 ( k ) that pr e c lud e s a

jud g me nt f

or the a tto rn e y s' fe e s a

nd c os ts i nc ur

re d in pr os e c uti ngit.
Grine , 439 B.R. at 471. “ A debtor is also unde r a duty to miti g ate their

damag es.” Id.
Turning to the case prese ntly befor e the Panel, it is important to note that the action found by the bankr uptcy court to violate the a

utomatic stay

was the Appellants’ continuation of the statecourt for eclosure proce edi n g af t er re ceiving notice of

Debtor’ s chapte r 13 filing . I t was not the Appellants’ f

ailure to c ance l the Sheriff’ s sale af ter the Contempt Hea

ring held J uly 19, 2007. For , a s is su ff ic ie ntl y c le a r fr om the re c or d, the ba nk ru ptc y c ourt e njo ine d th at sa le on

July 20 , 2 00 7 in the Con te mpt

Or de r. As a

re su lt, it i s n e c e ssa

ry to f oc us on wh e the r the ba

nk ru ptc y c ourt a bu se d it s discretion in finding that the Appellants willfully violated the automatic sta y when they

continued wi th t he fo re c los ur e a c tio n in

state c ourt

pr ior to t he c on te mpt

he a ri ngin b a nk

ru ptc y c ourt

.- 20-

The Appe llants do not disput e that they rec eived t i m ely

notice of the Debtor’ s bankruptcy filing. The y

wer e sent notice of the § 341 mee ting of cre ditors by first class mail on June 10, 2007, and a c opy

of the De btor’s plan on July 5, 2007. T h e De btor’s sche dules included the B arkston Property and the Pols t er s ’ l i en , and the plan pr ovided treatment of the Polsters’ judg ment lien encumbe ring the prope rty

. The Appellants also do not dispute that they rec eived the le tter fr om the Debtor’ s attorney

on J une 22, 2007, informing them that moving to re set the Sheriff ’s sale violate d the automatic stay

. Despite a ll this knowledg e, howe ver, the Appellants per sisted in moving forw ard with the Sheriff’ s sale of the Ba rkston Property . As discussed above , the Appellants ha d an aff irmative duty

to stop the pending fore closure a ction once the y rec eived a ctual notice of

Debtor’ s chapte r 13 filing . Clearly , they failed to do so. The ir mistake of law about the eff ect the doctrine of lis pendens on the prope rty is no defense to the § 362(k) a ction.

Moreove r, their a

rg ument that the bankr

uptcy court did not allow them the c hance to canc el the Sheriff

’s sale on the ir own has no impac t on the issue. The action which the ba nkruptcy court de te rm ine d v iol a te d th e a

uto ma tic sta

y wa s the Ap pe lla

nts ’ a c tio ns to re sc he du le the fo re c los ur e sa le despite knowledg e of the bankruptc y case , and fa ilure to take a ffirmative steps to stop the forec losure action prior to the Contempt Hearing . Whether the Appe llants canc elled the sa le af ter the Contempt Hea ring was irr eleva

nt. “[A] compensa

ble stay violation will exis t once a resulting i njury from the stay violation occurs. . . .” Ru sse ll , 448 B.R. at 216. Conseque ntly , any offe r by the Appellants at the bankr uptcy court he aringto canc el the Sheriff ’s sale w ould have ha d no eff ect on the f

act that the vio la tio n o f t

he a uto ma tic sta

y ha d alr e a dy oc c ur

re d an d da ma g e s inc ur

re d. Al l of the fa c ts i n thi s a pp e a l c le a rl y

de mon str ate th at th e ba nk ru ptc y c ourt did no t a bu se its dis c re tio n w he n it de te rm ine d th a t th e Ap pe lla nts wi llf ull y vio la te d th e a

uto ma tic sta

y a nd he ld t he m in c on te mpt

.

On c e a c ou rt de te rm ine s th at a party

ha s w ill fu lly

vio la te d th e a

uto ma tic sta

y , th e c ourt

is

re qu ir e d b y

§ 3 62 (k )( 1) to i mpo se sanc tio ns in a n amou nt e qu a l to the De bto r’ s actu a l da ma g e s. When attorney ’s fe es ar e re quested a s p ar t o f an actual damag es aw ard, a court must deter

mine whether the fe es ar e re asonable and whe ther they wer e proximately

cause d by

the violation of the stay . Debtors a

re a lso under a duty

to miti g ate their

damag es; claims for fee s i n cu rr ed in the prosec ution of

an unnec essar

y motion are not re cover able. See G rine , 439 B.R. at 471 ( “I f litigation- 21-

is unnece ssary

to affor d a complete reme dy to a debtor, the n th e fe es for commencingand prosec uting a

n action will fail . . . .”)

.

I n th is ca se , the Ap pe lla

nts c on tin ue d to mov e fo rw a rd

wi th t he fo re c los ur e a c tio n d e sp ite having knowledg e of the Debtor’ s chapte r 13 filing and despite r ece ivin g t h e warning le tter. Consequently , the Debtor had no choice but to file his Cont empt Motion with t he bankr uptcy court on J uly 17, 2007, and to appear i n co u rt at the Contempt Hea ring , to liti g ate the matter. I n the Appellants’ r esponse to the Contempt Motion, they did not alleg e they

would canc el the Sheriff ’s sale or that th e y w o u ld c e a s e a n y f u rth e r a tt e mp ts a t c o n d

u c ti n g a Sh e r if

f ’ s s a le

. I n s te a d , they claimed that the B arkston Proper ty was not prope rty of the estate under the doctrine of lis pendens and that the a

utomatic stay

did not apply to block their for eclosure eff orts. The Appe llants continued this arg ument at the Contempt Hea ring . At no time during t h e p en d ency of this case did the Appellants see k a d etermination from the bankruptc y court that the B arkston prope rty was not pr op e rty of the e state . F ur the r, the Ap pe lla

nts fa ile d to se e k r e lie f f ro m th e a

uto ma tic sta

y to continue with the state c ourt fore closure a ction.

A re view of the bankruptc y court’s Contempt Order makes clea r t hat the cour

t rejec ted the Appellants’ a

rg ument reg ardingthe doctrine of lis pendens . That orde r explicitl y states t hat the Ba rkston Property

was prope rty

of the e state pursua

nt to § 541(a) an d t h at the provisions of the § 3 62 (a ) a

uto ma tic sta

y a pp ly to t he pr op e rt

y . D esp it e the ba

nk ru ptc y c ourt ’s re

je c tio n o f t

his argument, the Appellants continued to m aintain that the B arkston Proper ty was not prope rty

of the estate f or the ne x t 3 1⁄2 y ear s. This persistence require d the Debtor and his attorney

to spend a

s u b s t an t i a l a m o u n to f

t i m e d e f e n d i n g t h e A p p e l l a n t s ’ a l l e g a t i o n s w i t h r e g a r d t o t h e p r o p e rt y; howeve r, the only

period of time wh i ch the De btor included in his reque st for attorne y ’s fe es wa s June 20 thr ou g h A ug us t 16, 200 7. Th e fi rs t entry wa s for pr e pa ratio n of t he June 22 , 2 00 7 le tte r t o Ei se nb e rginf

or min g him that th e Ap pe lla

nts ’ a c tio ns vio la te d the a

uto ma tic sta

y . T he ne xt 6 e ntr ie s, which compr ise slightly over 12 hours, wer e for the pre paration of the Contempt Moti on, revie w of the Appellants’ r esponse ther eto, and r esea rch a nd prepa rat i o n fo r the Contempt Hear ing on the Contempt Moti on. The ne x t three e ntries totaling 1.2 hour s, wer e for revie w and discussion of the Contempt Order with the Debtor. The last six entries totaling 4.1 hours, wer e for the re view of the Appel la nts’ motion for rec onsideration, pre paration of the Debtor’ s response the reto a nd prepa ration- 22-

for the hear ing. No requests wer e made for any other ti me s pent on the ca se af ter the he aringon the motion to re consider even though the Debtor was embroiled in litig ation on the contempt issue for the next three y ear s. The De btor did not request a ny fee s for time spent on the Sanc tions Moti on even thoug h resolution of that issue re lated dire ctly back to the Contempt Motion and Orde r.

I t is also important to not e that althoug h the Debtor first included a

copy of the stateme nt fr om h is att orn ey sh owin g the $4 40 5. 23 in f e e s a nd e xpe ns e s h e wa s se e kin g to r e c ov e r w ithhis

re sp on se to t

he c ourt ’s Sho w Cau se Or de r, the Ap pe lla nts ne ve r o bje c te d to the a mou nt o f t he se fe e s. They also failed to object to the certification filed by the Debtor ’s attorne y

on J anuar y 7, 2011, which included an e x act duplicate of the billing statement showing the hours and rate s used in ca lculating the re quested fe es.

I n its S anctions Orde r, the ba nkruptcy court c oncluded that it had revie wed the cer tification of fe es submitted by

the Debtor ’s counse l and found them to be “sufficie nt proof of the Debtor’ s damag es
. . . .” Kee ping in mind the require ments for a n awa rd of attorney s’ fe es under § 362(k),

a re vie w o f t

he e nti re re c or d in

thi s c a se ind ic a te s th a t th e ba nk ru ptc y c ourt did no t a bu se its dis c re tio n in sanc tio nin g the Ap pe lla nts $4 40 5. 23

. Th is am ount wa s equ a l to the De bto r’ s a tto rn e y s’ fe e s in c ur re d f ro m June 20 throug h A ug us t 16 , 2 00 7. Th e De bto r’ s atto rn e y ha d n o c ho ic e bu t to file the Contempt Motion to st op the Sheriff ’s sale. D efe nding the Appe l l an t s’ motion for

r e c o n s i d e r a t i o n w a s a

n e c e s s a r y e l e m e n to f

t h e p r o s e c u t i o n o f

t h e D e b t o r ’ s C o n t e mp tM o t i o n
. In fa c t, a str on g a rgume nt c ou ld be ma de that the wo rk pe rf or me d sin c e the ba

nk ru ptc y c ourt iss ue d it s order denying the Appellants’ motion for r econside ration would also be rec o v er ab le as sanc tions under § 362( k)(1) beca

use it is strongly

related to the orig inal Contempt Moti on; however , the De bto r d id n ot s e e k a

ny of tho se fe e s, so the y

a re no t a t is su e in t

his a pp e a l.

C. Re fusaland/ or F ail ur e to Co nduc t a n Evi de nt iar y He ar ing
The Appe llants alleg e that the ba nkruptcy court’s r efus al and/or f ailure to c onduct an evidentiar y hear ing on the alleg ed violation of the a utomatic stay

and the e x t en t o f t h e sanc tions denied them due proce ss. “The f undamental r equire ment of due pr ocess is the opportunity to be hear d ‘at a

meaning ful time and in a meaningf ul manner.’ ” Mathews v. Eldridge , 424 U.S. 319, 333,- 23-

9 6 S

. C t

. 8 9 3 , 9 0 2 (1 9 7 6 ) ( qu o t i n g Ar ms tro ng v . M an zo , 380 U.S. 545, 552, 8 5 S. Ct . 1187, 1191 (1 96 5) ). I t is we ll e sta

bli sh e d in the Sixth Cir c uit that a c ourt is n ot a lw a y s r e qu ir e d to c on du c t a fu ll evidentiar y hear ing w hen imposing sa nctions. Metz v. U

nizan Bank , 655 F.3d 485, 491 ( 6th Cir. 20 11 ); Silverman v. Mut. Trust Li fe Ins. Co. (

In re Bi g R ap ids Ma ll A sso c s. ), 98 F .3 d 9 26 , 9 29 (6 th Cir. 1996).
I n this circuit, there is no require ment that a full evide ntiary hear ing be held bef

ore imposing sanc tions. W hat is require d is that an atto rn ey re ceive fair notice and an op po rtu nit yfor a hear ing on the rec ord.
Me tz , 6 55 F .3 d at 49 1 ( e mph a sis in o ri g ina l) (i nte rn a l qu otatio n mark s a nd c itatio ns omi tte d) ; Stalley

v . M e tho dis t H

e alt hc ar e , 517 F .3 d 911 , 920 (6 th Cir . 200 8)

. “ An or de r to sho w c a us e , a lon g wi th the opportunity

to respond to said order , can be sufficie nt, in cer tain circ umstances, to provide the

nece ssary proce dural saf

eg uards.” Cook v. Am. S.S. Co. , 134 F.3d 771, 774 ( 6th Cir. 1998). I f a court ha s full knowledg e of the fac ts and the fa cts are undisputed, an evidentiary hear ing on sanctions is unne cessa

ry
. Bi g R ap ids Ma ll , 9 8 F .3 d at 97 9; W alker v. Cadle Co., Inc. (

In re W alker), 168 B.R. 114, 122 (E.D . L a. 1994). The rig ht to an evidentiar y hear ing pr ior to the impositi on of sanctions “is l imited to case s wher e a he aringwould assist the court in its decision.” Tra v e le rs I ns
. Co. v. St. Jude Hosp. of Kenner, La., Inc. , 38 F.3d 1414, 1418 ( 5th Cir. 1994). The dete rmination of whe ther a

n evidentiar

y hear ing w o u l d as s i s t i n the impositi on of sanc tions is wit hin a cour t’s discretion. W

ilson-Simmons v. Lake Cty. She riff’s Dep’t , 2 07 F .3 d 8 18 , 82 3 (6 th Cir . 2 00 0) ; Cook , 134 F.3d at 774.

I n th e c a s e p r e s e n tl y b e f o r e th e Pa

n e l, th e f a c ts h a v e b e e n u n d is p u te d a t a ll ti me s . The Appellants admitted having notice of the Debtor’ s bankruptc y filing w hen they proce eded w ith the state court fore closure action. As is evidenc ed by their responsive pleading s, it is also clear that the Appellants had notice of the he aring s on the Debtor’ s Co n t empt Motion, the bankruptcy court’s Show Cause Orde r, and the Debtor’ s Sanctions Motion. The attorney for the A ppellants appe are d at all of the r ele v an t hear ings. The Appellants also do not dispute having rec eived notice of the De bto r’ s r e sp on se to the ir mot ion fo r re c on sid e ra tio n or the De bto r’ s c e rt if

ic a tio n o f atto rn e y ’s fe e s. B oth of the se do c ume nts inc lud e d a c op y of the de ta ile d b ill ing state me nt sh ow ingthe $4 40 5. 23 in fee s the Debtor w as re questing . The Appe llants never obje cted to this amount either in wr iting orWhe n q ue sti on e d at or a l a rgume nt in thi s a pp e a l a s to wh a t e vid e nc e the Ap pe lla nts wo uld 8 have pr esente d at an evidentiar y hear ing, c ounsel for the Appellants wa s unable to pre sent the Panel with an answe r except to say that his clients felt like they wer e denie d their “da

y in court.”

- 24- at one of the hea ring s in the matter, or a

rg ued that the s ervic es reflec ted i n the bi lling stateme nt were

unnece ssary
.

I n its S anctions Orde r, the ba nkruptcy court stated that it h ad revie wed the c ertification of fee s submitt ed by

the Debtor ’s counse l and found th at t o b e “sufficient proof of the Debtor ’s damag es, and, a ccor d i n gl y , an evidentiary hear ing is unne cessa

ry .” This deter

mination that an

e vid e nti ary

he a ri ngwa s unn e c e ssa

ry wa s we ll w ith in t

he ba nk ru ptc y c ourt ’s dis c re tio n. Th e fa c ts

wer e undisputed, the Appe llants had bee n provided with sever al opportuni ties to be heard, and the Appellants neve r objec ted to the amount of fe es the De btor was r equesting as dama g es.

I n their appe llate brief

, the Appellants do not challeng e the amount of the attorney ’s fe es nor do they alleg e that the ba

nkruptcy court a bused its discretion in awa rding that amount without an

e vid e nti ary

he a ri ng . T he ir

so le c omp la int

wi th r e g a rd

to the la c k o f a

n e vid e nti a ry

he a ri ngwa s th a t, had they been g iven an oppor

tunity to present evidence , the bankruptcy court would not have found the m in c on te mpt fo r vio la tin g § 362

. As dis c us se d ab ov e , this a rgume nt i s w ho lly wi tho ut m e ri t. 8 Th e y did no t di sp ute havin g no tic e of the ba nk ru ptc y fi lin g a s o f a

t le a st J un e 10 , 200 7. Ye t, d e sp ite this knowledg e, they

failed to c ease pursuing the state c ourt fore closure pr ocee dings.

Pursuant to § 362(k), the fa cts in this case mandated the finding of liability under that section. Whe n a c re dit or wi llf

ull y vio la te s the a

uto ma tic sta

y , § 36 2( k) re qu ir e s a

c ourt to i mpo se sa

nc tio ns
. A cr editor’s mistaken be lief as to the applicable law is no defe nse to a deter mination that they

have willfully violated the stay

. Henc e, their alleg ation that the bankr uptcy court’s r efusa l to allow them an opportunity

to present e vidence would have some how alter ed this decision is baseless. The bankruptc y

court’s de cision as to the nec essity of an e videntiary h ea ring on the issue of the willfulness was well within its discretion and its ref usal to g rant that reque st was not an abuse of that discretion.- 25- V. CO NC LU SION

For the fore g oing r easons, the Panel aff irms the bankruptc y court’s order enter ed F ebrua

ry 4, 20 11 , im

po sin g sanc tio ns a g a ins t th e Ap pe lla nt.