Missing oil filter = engine locking

[Ball3rina]

I purchased my '09 Yaris sedan from Carmax in March and have had no issues until this past weekend. I was 400 miles overdue for an oil change I was going to wait until Monday to do. I let my boyfriend drive and he accelerated heavily at a traffic light changing and the oil light came on and a puff of smoke came out. We turned around the block to get back and shut it off and it lost engine power and idled.

I got it towed and the mechanic said I was missing the oil filter which probably wasn't tightened enough when Carmax serviced my car. Either way, it looks like I have to buy a new engine and Carmax isn't helping, even though I am covered under their extended warranty.

Thoughts/suggestions? Prior, I had received no alert lights or noticed any heavy oil spillage. The car still won't start and makes a clicking noise from the engine.