1. If you hired a home inspector to do the home inspection, and the problem is obvious, the inspector may be the one to be blamed. Though I am not sure about your local law and regulation.
2. See if you can prove that owner B had known this problem before s/he sold it to you, and if this is required to be disclosed.
I would talk with a real estate attorney before I do anything further. One hour consultation with an attorney is only about $200. But be careful when decide to use the attorney or not.
Good luck!