Dealer did not disclose major engine issue

We bought a used car about 3 months ago. It had 27,000 miles on it. Turns out after bringing it to Nissan because of smoke issue the car was flagged by Nissan and was to be sold at auction with "no engine warranty". The small dealer I bought it from never disclosed any issues or any flags to the engine warranty. Now I have a car that needs a new motor. Car was sold in New Jersey. ;