My question involves a consumer law issue in the State of: Kentucky
I bought a brand new 2012 Kia Optima in June. I took it to a major chain shop for the first oil change. A couple of days after that the check engine light and low oil pressure light came on. I checked under the hood and discovered the shop did not put on the oil cap: the engine was soaked in oil and the dipstick dry. Towed car to dealer I bought vehicle from. They have not conducted a full engine tear down but did drop the oil pan and discovered metal shavings in the pan and metal particulates floating in the oil (I have pictures and a bottled sample). Dealer, and several certified mechanics I know, deem this as evidence of internal engine damage. Dealer and certified references say a full engine replacement is necessary to ensure that I get my 'new car' back 'new'. Dealer further states a new engine is mandatory to preserve the warranty.
The shop that did this work admitted fault, and their manager agreed that they are 100% responsible and was horrified that they did this to a brand new car. However, their insurance company is another animal entirely: they are refusing to pay for the engine, and have told me that "shavings mean nothing". They require a full engine tear down (estimated at $2500 cost) but insist "I" must pay to have it done and that if there is 'confirmed damage', they will replace the engine; however, they state that if they find nothing, the teardown bill is my problem. What are my rights here? I think it's absurd that I should pay thousands to do what they require when I have the dealer, certified second opinions, and metal shavings in a new car. At this point, isn't burden of proof shifted to them to prove that the dealer is wrong and that the engine is okay?
Please help: I am afraid this is headed to civil suit and I can say (without saying names), that the company I am up against is big, rich, and powerful. They know I cannot afford a teardown and am using this to bully me into 'accepting the car as is' and a $300 check they sent me in the mail (and that I have not cashed because in fine print is says that cashing of the check amounts to full and final payment).

