Here is what CA DMV says about smog upon sale of a car:
When a car is sold, who is responsible for the inspection?
The seller is required to provide the buyer with a valid smog inspection certification at the time of the sale or transfer. Smog certifications are good for 90 days from the date of issuance.
The inspection is not required on a transfer if a biennial smog certification was submitted to DMV within 90 days prior to the vehicle transfer date (a vehicle inspection report may be required for proof of certification).
NOTE: Smog certifications are not required for transfers that occur for a gasoline powered motor vehicle that is four or less model years old. (Determine the oldest-qualifying year model by subtracting three from the current year) the four or less model years old rule does not apply to diesel powered vehicles. A smog transfer fee will be collected from the new owner.
Clearly, the seller is deficient in his responsibilities here. I would first see if the CA DMV Bureau of Consumer Assistance can offer help. If not, I would file in small claims court or engage a lawyer, depending on the value of the car. The seller is obligated to provide a clean smog check, so the seller is on the hook for this one. Since the vehicle title is in a dealer’s name, I suspect the dealer is on the hook here, as well as the individual seller/salesman.