ok how else is he gonna prove that he payed more than $2000 for it? for one its his word against the other guy. if its says salvage on the tittle, the seller could just say "i showed him the tittle and told him its salvage" and a judge will look at it(the tittle) and ask the buyer "didn't you look at this tittle carefully?" and even if he wins the case he gets his $2000 back but he gives the car back. he just lost $3000.
now if the buyer runs into trouble smogging it or any inspections he would have to chose whether to spend more money and fix the problem or get his $2000 back, again he just lost $3000.
unless the seller is nice enough that he will give him a full refund willingly, he can kiss that $3000 good by.i would check with your local police to see if that motor is stolen, if it is then maybee you got a case against him.

$5500 is not bad for a gsr with a b16a in it even if it is salvage as long as its not a wrecked victim, make sure the chasis is straight.
you figure if you want a gsr motor in again you could sell the b16a swap for about $2500 and get yourself a gsr swap for $3500 so your looking at about a little over a grand to drop a gsr motor in that thing again.