Middletown Nissan SHADY MECHANICALS!!!! Middletown, Connecticut

I purchased a 2004 Nissan Maxima from Middletown Nissan on July 11th, 2011. I purchased a warranty through Superior Protection Plan for 2 years, or 24,000 miles which covered all major components, including transmission, engine, etc. Two days after having the vehicle, I noticed when switching gears or when slowing down then accelerating the car would jerk really hard and make a loud noise, I knew it had something to do with the transmission. I brought the car to Middletown Nissan for them to look at it and of course it conveniently wouldn't make the noise or jerk when they had it, so they couldn't do anything about it.

A couple weeks later, the car was overheating so since I work part-time for the Executive Auto Group, I brought the vehicle to Executive Jeep Nissan and the radiator was cracked so they had to replace it (which was under warranty) and while I was getting that taken care of I asked them to check out the transmission issue and they heard it right away. It ended up being the motor mounts that needed to be replaced (which was also under warranty), so for both of those problems I was only responsible for the $100 deductible I have.

It's been 3 months since I purchased the vehicle, and a couple weeks ago I heard a crazy noise, so I stopped at my job for them to check it out, and they said I needed a new engine. I was appalled!!!! I brought it to the Nissan I work for, and they broke down the engine and had an inspector come down from the warranty company to take a look at the vehicle. They denied coverage because they said the reason why the engine is going is because of a lack of maintenance with the vehicle. They said there was a build up of sludge in the motor which was causing the engine problem.

Now, this lack of maintenance issue was obviously with the previous owner of the vehicle, since I've only had it for 3 months and I did get the oil changed! Middletown Nissan is saying the cost of a new engine is $6,000, and that they will cover $2,500 and we will be responsible for $3,500. However, I feel that this situation is ridiculous and I should NOT be responsible for the cost of the engine. I've requested that they take this vehicle back and give us a different comparable vehicle, but they denied. I truly feel I should not be responsible for this and I don't know what to do.

PLEASE HELP!!!!