BMW refuses to fix an issue even dealer agrees is their fault.

OK, so I have to rant about something. I have a 2004 530i with 27,000 miles. I took it to the dealer recently for a brake fluid flush, coolant flush and some other basic maintenance. The car also exhibited a very occasional glitch that caused the radio to be muted about 1 out of every 20 times the car was started. If the car was turned off, the problem cleared on restart.
When the dealer looked at my software loaded, they said my car was last upgraded in 2007 and there were 7 software updates. Would I like them installed for $150? I said sure and hoped that the upgrade might clear the occasional muting glitch.
Well, the software upgrade crashed the entire module, so now I have no I-Drive, no radio, and no park assist or anything else associated with I-drive either. The dealer blamed the issue on the software upgrade and assured me that it would most likely be covered by BMW as they caused the issue. Long story short, BMW is refusing to cover anything even though the dealer agreed to eat the entire labor cost in order to take care of the situation.
Now, I am sitting on a $1300 repair bill that I cannot understand how I am responsible for. Has anyone else heard of anything like this? I cannot even get anyone at BMW to explain why it is not being covered. The dealer still stands on their original thought that BMW should have taken care of this.
Any help, thoughts would be appreciated.

I understand your frustration.

It is possible the technician may not have followed the procedure properly causing the software upgrade to fail.

If I were you, I'd file a claim in the small claims court against the service dept that performed the service on your car. The car went in to the dealer with working iDrive and broken while it is in their hands. It's pretty simple from legal stand point. The dealer, in turn, can file a claim against BMWNA. *I am not a lawyer*.

Thanks pcy. I am waiting on the service manager to call me right now. I really don't want to go down a legal road on this, but I am not sure where else to turn at this point.

Please keep us posted with result!
Also which dealership is this so I can avoid it.

Sent from my SGH-I747M using Bimmer App

Actually, the dealer has been great. It is Sterling BMW in Newport Beach, CA. Actually found out today that they went to bat for me and convinced BMW to take care of it. Tony, Kevin And Mel at Sterling are awesome and I appreciate their help.

It is Sterling BMW in Newport Beach, CA.

If this dealership is everything you say it is, they will step up and fix the problem at no cost to you. Let us know how it goes. It wouldn't hurt to point out this thread to them.

That is what is happening. Service manager Kevin called me last night to give me the good news. Really happy that all ended well. Thanks for the comments everyone.