Spaghetti Sauce with Meatballs

I have a ton of tomatoes right now from my garden, and figured a good use for them would be to make my own spaghetti sauce. I found this recipe on allrecipes.com, and modified it slightly for my needs (it used canned tomatoes, so see the original recipe if you are using canned).

Ingredients:

Meatballs
1 lb lean ground beef or ground turkey
1 c fresh bread crumbs (I made mine from Udi's gf bread)
3 T fresh parsley, chopped (or use 1 T dried)
1 T parmesan cheese
1/4 t ground black pepper
1/8 t garlic powder
1 egg, beaten

Sauce
3/4 c chopped onion
5 cloves garlic, minced
1/4 c olive oil
7 c fresh tomatoes, chopped
2 t salt
1 t white sugar
1 bay leaf
1 (6 ounce) can tomato paste
1 T or more fresh basil, chopped (or 3/4 t dried)
1/2 t ground black pepper

Directions:

1. In a large bowl, combine ground beef, bread crumbs, parsley, Parmesan, 1/4 teaspoon black pepper, garlic powder and beaten egg. Mix well and form into 12 balls. Store, covered, in refrigerator until needed.
2. In a large saucepan over medium heat, saute onion and garlic in olive oil until onion is translucent. Stir in tomatoes, salt, sugar and bay leaf. Cover, reduce heat to low, and simmer for 2 hours. 
3. Stir in tomato paste, basil, pepper and meatballs and simmer 30 minutes more. Serve.