Why are subsequent clips either above or below the main clip and blurred?

I am new to iMovie 10. 
I have imported three clips into iMovie.  I selected one and dragged it into the timeline area.  I selected the second and dragged it into the timeline area that followed the first clip.  Now, when I select the third and drag it into the timeline area, for some reason it rests above the first and second clips and no matter how I position it, I can't get it to be inline.  It's either above or below.  Also, it doesn't reveal the entire third clip.  It just blurs it at the bottom and I can't see the waveform.  Why is this and how do I place my clip all in one line?

Can anyone help on this? 

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