[or] Kia Replaced My Engine Under Warranty, Car Became Undriveable 4 Miles After Dealer’s Post-repair Test, Now Dealer Wants $4,314 For Clogged Catalytic Converter They Say Was Likely Caused By Failed Engine

I’m looking for advice about whether I may have any legal recourse against a Kia dealership or Kia America after an engine replacement.

I have a 2016 Kia Optima 2.4L with approximately 161,000 miles. I bought the car new.
The original engine developed a P1326-related failure. I brought the vehicle to a Kia dealership, and Kia approved an engine replacement.

The dealership replaced the engine. Before returning the car to me, they contacted me recommending several additional services, including drive belts, transmission fluid service, brake fluid flush, fuel injection service, tires/alignment, and a driver-side axle. I declined those services.

The catalytic converter/exhaust system was not included in those recommendations, and I was not warned that there was an exhaust restriction or that the catalytic converter needed replacement before I drove the vehicle.

The dealership then told me the vehicle was completed and ready for pickup. I picked it up and drove only a few minutes before the check-engine light came on. I pulled into a nearby Walmart parking lot, turned the vehicle off, and it would not restart. It had to be towed back to the Kia dealership.

I have an original video that I took immediately after the vehicle became disabled showing the odometer at 161,629 miles.

After the vehicle was returned, the dealership diagnosed a clogged catalytic converter/exhaust manifold catalytic converter. Their written diagnostic states that the technician found rich-condition codes and an obstructed exhaust/intake and, upon inspection, found a clogged manifold catalytic converter.

They quoted me:
Part: $3,992
Labor: $322.50
Total: $4,314.50

I cannot afford that repair.

Here is where I’m particularly concerned.
My service advisor subsequently left me a voicemail explaining the diagnosis. In that voicemail, he specifically said: “The cat is clogged and it’s most likely due to the failed engine from what we’re seeing.” I still have the original voicemail.

The dealership attempted to obtain “goodwill” coverage from Kia for the catalytic converter, but Kia initially declined it based on the vehicle’s mileage and the catalytic converter being outside the applicable federal warranty of 80,000 miles.

I have now opened a case directly with Kia America and am providing them my evidence.
I also requested the dealership’s complete documentation concerning the engine replacement and its post-repair testing.

The dealership responded in writing that after replacing the engine they:

-road-tested the vehicle approximately 3 miles
-recorded mileage going from 161,622 to 161,625
-performed a post-repair scan and found no diagnostic trouble codes
-did not save a screenshot of that post-repair scan because no codes were allegedly present
-have no additional notes associated with the road test

My video shows the vehicle disabled at 161,629 miles.

Therefore, even accepting the dealership’s documentation completely, the vehicle became undriveable only about 4 miles after the mileage at which they say their successful post-repair road test ended.

There is another issue I’m trying to understand. The diagnostic scan from before the engine replacement shows the active P1326 code but also shows O2-sensor-related historical codes. After the breakdown following the engine replacement, the dealership documented rich-condition codes and ultimately diagnosed the clogged catalytic converter.
I am not claiming that I can prove the dealership caused the catalytic converter failure. My concern is that their own service advisor said the clogged converter was most likely due to the failed engine that Kia had just replaced.

If the failed engine damaged/clogged the catalytic converter, I’m having difficulty understanding why I should be responsible for a $4,300 consequential repair immediately after Kia replaced the failed engine.

I’m also concerned about whether the vehicle was adequately diagnosed and tested before being released to me. If they had identified the clogged converter before releasing the vehicle and warned me that driving it could cause a problem, that would be a different situation. Instead, I was told the vehicle was ready, drove a few miles, and it became undriveable.

The dealership has told me there is nothing further they can do, although they have agreed not to charge storage fees while I figure this out.

My questions are:

If the dealership/Kia acknowledges that the catalytic converter was likely damaged or clogged as a result of the covered engine failure, could Kia potentially be responsible for the consequential damage even though the catalytic converter itself is outside its normal warranty?

Does releasing a vehicle after an engine replacement, only for it to become undriveable approximately four miles after their documented post-repair mileage, raise any reasonable negligence/workmanship issues?

Is there any significance to the dealership recommending numerous other repairs before releasing the vehicle but not identifying the exhaust/catalytic-converter problem that made the vehicle undriveable minutes later?

What records should I request or preserve? I currently have repair orders, diagnostic screenshots, emails, the original voicemail from the service advisor, the video showing the odometer immediately after the breakdown, towing information, and the dealership’s written explanation of its three-mile road test.

If Kia America ultimately refuses assistance, what would be the appropriate next step? An independent mechanic/expert inspection, a demand letter, state consumer protection complaint, small claims/civil action, or something else?

I’m primarily trying to determine whether I have a legitimate claim worth pursuing before I spend money I don’t really have on attorneys or additional diagnostics.

Location: Oregon. Dealership is in Oregon, I live across the bridge in Washington.