Newly created folder in Exchange email account populates to wrong location

I am trying to make a new folder in my exchange-based email account from within Mail. However, when I try to make it show up underneath my inbox in left column (like all the other existing folders) it instead creates the folder in a brand new root directory. I have a pic uploaded at http://gallery.me.com/jgelfond/100035
I want the new folder to be with all of the other folders under the "Seven-Star" inbox at the top, but instead my "test" folder is created in a brand new "Seven-Star" directory at the bottom. I can then manually move that folder to inside any of the folders under the topmost "Seven-Star" folder, but not at the level that the "Clients" and "filing" folders are at.
Any help? Thank you!

another note: if I go into the webmail service for my Exchange-based email address and create the new folder there, it will populate in the same place as all of my previous folders (at the top, if you look at the picture). The folders will only be created at the bottom if I create the new folder from within Mail.
Any help would be appreciated!

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Close.
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Newly created folder in Exchange email account populates to wrong location

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