Originally Posted by trader4

How do you know for a fact that the BMW dealer involved won't put in
a used motor to solve a problem like this, where, if what the poster
says is true, it sure looks like they are at least partly at fault? You
can't determine what outs any of the parties have without knowing
what the actual cause of the failure is. At the very least, I don't
see what good out the BMW dealer has. They worked on the car, he
picked it up, went one mile, the CEL came on, he returned. They
cleared the light, never told him what it was and sent him on his
way. Twenty miles later the engine is shot. That would seem to make
a pretty good case that when he returned with the CEL, there was something very wrong with the car, which they failed to correctly assess.

If he can get a similar mileage used engine installed for $7K, that
would be an option. But before just giving up and accepting that,
I would find out what the actual failure was, if it was related to the
filter, if it likely was the cause of that CEL return visit, etc.
Then if it looks like the dealers have responsibility I'd be aggressively
sticking with a rebuilt engine strategy. He can always go lower,
but I wouldn't at first. And depending on what the actual failure was,
he may be able to get the 3 parties to agree to split the cost.