So the latest on this saga is this:
Had a transmission specialist look into it and their professional opinion about what could have happened was this:

The shop that did the initial engine transplant could have possibly made a slight error when installing the transmission to the engine. Supposedly the unit that goes over the torque converter to lock it into place somehow was damaged. I will send pictures shortly. As a result, the torque converter was damaged. These are the items that I am being told have to be replaced. Torque converter, pump assembly, input K1 clutch, front pump seal, filter & gasket and an overhaul kit. The price I have been given is $6K.

My question to you all is, does this make sense? In your opinion, is the original shop at fault? How can I prove they were negligible and could have caused this? Do I have a case to take them to court? At this point the original shop are denying any wrongdoing and claim they did everything properly despite the fact the car went back to them 3 times for an Axle bolt coming loose, a linkage cable not connected and the last time which they told me was the transmission and claim they never touched the transmission. I am no mechanic and this is not my field of expertise but it would make sense to me that they would have to at some point come into contact with the transmission in order to connect to the engine correct?

This whole situation has been very stressful to say the least.

What are your opinions?

 

The transmission shop should be able to look at the torque converter and pump to tell you if the install was bad. I don't know the exact procedure for the MB unit in your 4S, but if you do not seat the converter to the pump and use the locking tool on the ZF units, you will destroy the pump and converter. I know of a couple of cases where this has happened to folks with ZF units. The crank also must be locked at a specific location.

Based on your description, this could have happened. It does look like the converter has some scoring on the face of the hub at the 5 o'clock position, but it is hard to tell from the photo. Query your current shop concerning this and have them look at the engagement area on the pump as well.

Other things that can go wrong on the ZF install is 1) Confusing the vacuum lines to the switch valve will result in overheating fluid temps and 2) incorrect filling procedures which will also destroy the tranny in short order. I

It would be very difficult to speculate on the exact cause without personally inspecting the parts involved. I think your current shop would be in the best position to give you a complete picture of why the MB unit failed. Ask them to carefully document their findings along with supporting detailed photographs.

 

For death blows a court time would be nice. If you could get the cost on their insurance company then it would force them to pay attention very much to making good by you. Most company's operate off of what the insurance company allows or doesn't allow.

Yah I'd say the engine swappers fouled up the trans. With documentation of the trail of errored install problems it should stand out that they screwed up having an unfit mechanic do the job. The PPI should say the car didn't have most of the problems till somebody wrenched in there. I don't like the lawyer games but most prefer the game for financial rewards and righting the problem. I think the bill is past small claims. With a lawyer involved there is going to be initial costs to you but I'm sure the lawyer will try to settle you down with going for damage awards for you. Of course he gets a cut of that too.

 

Here's the best advice you'll get.. RUN RUN RUN AWAY FROM THAT SHOP AS FAST AS YOU CAN!!!
Axel bolts only come loose when there not torqued.
shift linkages only come loose when there not installed properly or removed improperly.
The mechanic working on your car is the problem first and foremost, you need to find a reputable shop to fix the damage they have caused..

 

What StephenB said. Have the current shop document was found. Take pics. Lots of pics.

Then consider small claims court.

When you take your car to an automotive repair shop for work -- as long as the shop advertises itself to be capable of servicing your car -- this shop owes you reasonable skill and care and experience in servicing your vehicle.

You did not receive that, your vehicle did not receive that. This then violates the business agreement you had with the shop and you are entitled to some compensation. Ideally the cost of undoing or correcting the damage the 1st shop did to the car, to the tranmission.

You'll have to research small claims court rules/regulations in your state to see just what you can ask for.

There is also the possibility you can file a consumer fraud complaint against the 1st shop. Research consumer fraud in your state. The county has a consumer fraud division and if it like here there people there who are willing to advise you and help you file a complaint if one justified and I think -- not a lawyer though -- it is.

Sincerely,

Macster.