Can't Upload Through File Manager

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When I try to upload a photo through the file manager it seems to upload but then the file does not show a filename and the photo's size appears as 0 kb. Attached is a screen shot. When I look at the files folder through FTP it looks like the file manager creates a folder within files with the owner Apache that I can't delete or change permissions on, and then is not able to upload the photo file within the folder. I have the permissions on the files folder set to 777. Is there something else I need to change on the server to get this to work? I am able to get the File Manager to work when I set up my site on my local machine.

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