[scottomfg]

As far as I can tell, it's impossible to have just the driver-side rear seatback down--it can never be lower then the center section, but it can be higher. This is SUPER annoying, and really befuddling as to why BMW thought this was ok. Like OP, we have car seat on passenger side, so in that configuration we can't really have any of the seats down since the center one can't clear the car seat.

The only solution really is to move car seat to driver side and put the passenger side down by itself. This will work in a pinch, but I definitely prefer to have kiddo on passenger side so driver can see him.