Foul business
Based solely on what F has told us, engineer E acted unethically in the beginning and now appears to be resorting to extortion. He should have withdrawn from the project once the relationship started as he could no longer act for the best interests of the original clients (N and J). Demanding money allegedly owed by J and witholding the plans that N and J have already paid for sounds like extortion. By failing to provide the "as-built" plans to the town, E would appear to be in breach of contract.
F should let J know what she has been doing. She should report E to the relevant professional engineering society, the town, and possibly the police, after consulting a lawyer. Someone should investigate how N and J (and now J and F) can live in a house for a total of 6 years without a certificate of occupancy.