Keith Hammond drafted and signed articles of organization for Jetmar Properties LLC in November 2002, but he did not file the articles with the secretary of state. Later that same year, Hammond, acting as president of Jetmar, offered to buy commercial property from Selwin Ortega. Hammond and Ortega signed a purchase agreement, but the sale did not close because Hammond did not have the money. Nonetheless, based on Hammond's representation that he needed cash to develop the property into condominiums, Ortega gave Hammond a three-day, unsecured $200,000 loan, which Hammond failed to repay. In April 2003, Hammond met Dale Stone, a retiree, and convinced him to invest in several of Jetmar's "real estate ventures." During the course of their relationship, Stone gave Hammond more than $50,000 in cashier's checks for Jetmar's various projects. Sometime in May 2003, Hammond asked Stone to quitclaim a duplex to Jetmar to improve Jetmar's balance sheet, which would allow it to secure financing for a large condominium development. Stone was renting out the property to supplement his Social Security income. In exchange for the deed, Hammond promised Stone an interest in the development.
Hammond also told Stone that he would deed the property back to Stone "free and clear" in sixty days and that Stone could continue to collect rent. On May 14, 2003, Stone quitclaimed the property to Jetmar. Hammond purported to accept the deed as Jetmar's president and recorded it the same day. On May 15, 2003, Hammond mortgaged the duplex to Ortega in exchange for an extension on the $200,000 loan. Ortega recorded the mortgage on May 20, 2003, after checking the title and determining that Jetmar had title to the property by virtue of a quitclaim deed from Stone. Hammond did not repay the loan or deed the property back to Stone. Sometime around December 2003, Ortega began foreclosure proceedings. Ortega sent the duplex tenants a notice of foreclosure, which they passed along to Stone. Stone confronted Hammond about the mortgage, but he was told that there would be time to redeem and regain title to the property. Based on Hammond's assurances, Stone did not alert Ortega of his claimed interest. On March 2, 2004, Ortega conducted a sale under the foreclosure-by-advertisement procedures. Because there were no higher bidders, Ortega purchased the property in exchange for the surrender of his $200,000 claim against Jetmar. Hammond filed Jetmar's articles of organization on March 11, 2004, and received a certificate of organization. Stone brought this action in October 2004, alleging that Hammond and Jetmar had defrauded him. Stone sought damages and a declaratory judgment that he was the owner of the duplex. What do you believe the court will rule? [Stone v. Jetmar Properties, LLC, 733 N.W.2d 480 (Minn. App. 2007).]