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How's the Crisis Being Covered by Lebanese Media?; Leonards Sue Nationwide Over Hurricane Damages

Aired July 13, 2006 - 13:32   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: Well, how's the crisis being covered by the Lebanese media? I'm joined now by Octavia Nasr, our senior editor for Arab affairs.
And before we get into how television overseas is handling this, you just got off the phone with friends in Haifa. We have just been able to confirm that two rockets were fired from Lebanon into the city of Haifa.

What did they tell you? Did they feel the effects? Do they know what's going on?

OCTAVIA NASR, CNN SR. EDITOR FOR ARAB AFFAIRS: They felt the effects. They heard a big boom. It was very close to the people I was speaking with, and these people live on Mount Carmel, very near that shrine, the Bahat (ph) shrine that you and Carol were talking about earlier.

Basically, they said that they were going about their daily routine, really; although there were clashes this morning, they did not expect the clashes to hit Haifa. This is the farthest Hezbollah has hit inside Israel so far.

So basically they tell me that they're watching television, waiting for announcements. Usually, that's what happens, Israeli authorities send out messages to people to get to lower floors or to shelters if possible, when the need arises.

So when I talked to them, which was just a few minutes before this interview, they said that they were still waiting, they still didn't feel it was dangerous enough for them. They were still at home trying to collect each other, call each other, make sure everybody's OK at this point.

PHILLIPS: I think that's interesting. This is a way of life for people there -- they either have shelters in their homes or they know of one they can go to.

NASR: Absolutely. It is a way of life. You know, we're always amazed at the story. You know, we look at street scenes after bombing, after attacks, like the ones we've been witnessing in the last few days. And they say, how can people just continue with their life? Well, they do. As a matter of fact in Lebanon, you're looking at these pictures, people are stocking up on groceries, and gas and bread and so forth because they think they might be stuck inside their homes for a while. You know, people just -- life continues. You know, schools continue to be open. Businesses are open. People usually are -- some people are cautious, others show up for work or go to school.

But, you know, like in Lebanon, for example, the only announcement I heard between yesterday and this morning is that the Lebanese university announced that they canceled the exams. They didn't say that classes are canceled, but only exams are canceled to give people a break so they don't have to prepare for those. But life continues. People are used to it.

PHILLIPS: And we've mentioned that we've been monitoring all the angles from television here, Israeli television, Lebanese television, but Hezbollah, the terrorist organization, deemed that by the U.S. and Israel, also has its own network. Tell us about the images, what's happening on Hezbollah TV. I believe we're actually going to bring some up and you'll let us know how they've been covering this crisis.

NASR: Sure on Al-Manar TV -- you're looking at it here -- this is their anchor, and behind his the word "Al Afla (ph)," which is "news." There's the logo, and very important here to say here, that Al-Manar it is banned in the U.S., it's banned in Europe.

So no one can see this television in the U.S. or Europe. We are downlinking this signal via several hops to get it to our viewers and in order to find out how they're reporting the story. But you can see, they're reporting the story from their perspective.

But what's interesting is the -- when it's not news, for example, the videos that they're showing. Al-Manar, for example, has an interesting video. If the control room can show it to OUR viewers now. It shows basically Hezbollah activists, militants in training. It shows them -- basically if you watch Al-Manar TV, if you watch that video that I'm talking about, you'd think that the country is at war already.

Now, forward to another TV station, the Lebanese Broadcasting Corporation, which is a Christian TV station in Lebanon. Well, they have this picture, for example.

PHILLIPS: Let's listen, for a minute. Can we listen to it? Let's listen for a minute.

OK, so if you're watching, you think, hey, life is grand right now; there really aren't any problems going on.

NASR: Exactly. And basically these people you're seeing here singing, they are the artists of Lebanon, singers, actors, actresses, really icons for their country, and all of them are singing a song for -- it's a national song for the Cedar of Lebanon. You know, Cedar is the symbol of Lebanon.

So really a huge difference between what LBC is showing here, which is national unity, Muslims, Christians coming to the and singing for one country, for one symbol. Whereas on Hezbollah TV, Al-Manar TV, more images of escalation and more fatigues, you know, military fatigues, and war and rockets and so forth. PHILLIPS: So right here, Hezbollah TV...

NASR: Oh, here's the video that I'm talking about.

PHILLIPS: ... it basically looks like -- what are they saying? When you were listening to this broadcast, what were they saying here?

NASR: You know, you see there, that's the flag of Hezbollah being raised. A lot of basically glorifying Hezbollah, the Hezbollah leaders, the Hezbollah fighters, as you can see here, demonstrations, reminding people of certain events, attacks by Hezbollah on several targets, but especially, especially, in the south and against Israeli forces. So basically reminding people of where Hezbollah comes from.

This is the secretary general of Hezbollah.

And there, the militants, again, during either posing for the camera or training camps.

PHILLIPS: It's interesting, two totally different perceptions.

NASR: In one country.

PHILLIPS: Octavia, thank you so much. We'll talk more throughout the next two hours.

NASR: Sure thing.

PHILLIPS: Well, people who lost almost everything in Hurricane Katrina say they're being victimized again, this time by their insurance companies.

Coming up, we're going to meet a Mississippi couple who've gone to court saying Nationwide was not on their side. It's a landmark case. We're going to talk to them live.

(COMMERCIAL BREAK)

PHILLIPS: Well, thousands of Gulf Coast homeowners are rooting for Paul and Julie Leonard. Hurricane Katrina did more than $100,000 worth of damage to their home in Pascagoula, Mississippi. Their insurance company paid them $,1600. Nationwide Insurance says water, not wind, did most of the damage, and the Leonards were insured only for wind.

Now, the Leonards are suing and the outcome could influence dozens of other suits. Paul Leonard and his lawyer, Dickie Scruggs, join me from Gulfport, Mississippi, where the trial is underway.

And, gentlemen, I know you've got to get back in the courtroom, so we'll try and get through this as quickly as possible.

But, Paul, I want to start with you. Here you are -- I want to set up the fact you're a police officer, you're a lieutenant. Did you actually have to work the aftermath of Katrina and Rita, and work during it, in addition to tending to your own home, which was almost wiped out?

PAUL LEONARD, PLAINTIFF: Yes, ma'am, I worked during Katrina almost continuously and then dealt with all the cleanup and rebuilding afterwards, too.

PHILLIPS: So after everything happened and you realized how much damage you had to your home, what do you remember that your insurance agent told you -- Jay Fletcher I believe is his name. When he sold you your insurance policy, did he tell you if you had this type of damage it wouldn't be covered?

LEONARD: I felt reassured, knowing that I had a hurricane policy, that my agent sold me a policy that covered everything, all perils and any damages due to hurricane. He reassured me of that.

PHILLIPS: So, Paul, we got a statement from Nationwide and they said that "Agent Jay Fletcher at no time told the Leonards they did not need insurance to be covered against floodwater and hurricane damage. It is of no benefit to Mr. Fletcher not to sell the Leonards flood insurance. He would have collected additional commissions from the federal government if he sold the Leonards a flood insurance policy."

Dickie, let me ask you, do you believe this is true?

RICHARD "DICKIE" SCRUGGS, ATTORNEY FOR LEONARDS: The amount of insurance premium that agents collect from flood policies is about $30 to $40. It's not worth their paperwork, and that's why they discourage their homeowners from buying it, because they can just up the contents coverage and make much more commission.

PHILLIPS: So, Dickie, do you think you've got a strong case here, because the contract specifically talks about wind and water, correct?

SCRUGGS: It does, and then it also has a hurricane endorsement and hurricane provision in it, yes.

PHILLIPS: Interesting. What's a hurricane endorsement?

SCRUGGS: It says that you're covered for all hurricane perils defined by the National Weather Service, which includes storm surge and wind.

PHILLIPS: So, Paul, you thought OK, no problem, I've got the hurricane endorsement, I'm OK if something happens to my home.

LEONARD: Yes, ma'am. After a couple of weeks of getting the city back online to where we could function as an entity, that's when I started dealing with my own problems and realized that, hey, I'm in good shape. You know, got somebody on my side, ready to go for me. And it turned out that it just wasn't quite that way.

PHILLIPS: Dickie, we did get another statement from Nationwide saying that "Nationwide put it in writing every year for the Leonards, clearly stating their policy did not include coverage for flood damage. Nationwide paid the Leonards for the wind damage and that was covered by the policy they purchased. Unfortunately, virtually all of the damage in this claim was caused by flood in the Leonard's policy."

Is that true? Because you're talking about some sort of hurricane condition, but according to Nationwide, that's not the case.

LEONARD: I was out in it and I can tell you we had a hurricane and we had lots of storm surge. And I don't remember a flood coming from the river, no ma'am.

PHILLIPS: All right, Dickie, you've looked at the contract. So does this make sense?

SCRUGGS: Yes, it makes sense, because the storm surge and a flood are entirely different geophysical events according to the National Weather Service. That's what Nationwide's policy looks to, tells the homeowner to look to. And when Paul Leonard asked his agent about flood coverage, he was told he did not need it because he had hurricane coverage.

PHILLIPS: So let's see those pictures, Paul. You've actually got pictures of your home. Is that correct? Go ahead and show me.

LEONARD: I've got a couple of pictures.

PHILLIPS: OK, go ahead and tell me what we're looking at.

LEONARD: This would be the garage, the entrance doors to our garage. After Hurricane Katrina, it appears that wind has ripped the doors to pieces, allowing the water and whatever else to intrude and do other damage inside of the garage.

PHILLIPS: Well, Paul, let me ask you this also. As you continue if you want to show us more pictures, that is fine. Nationwide said they had called you annually and said, hey, you're not covered with regard to hurricane damage, for wind and water. Is that true? Did they contact you every year, telling you and reminding you that your policy did not cover wind and water?

LEONARD: They never called me. No, ma'am, never.

PHILLIPS: And so, Dickie, do you have a case here? I mean, are you able to prove that, that Nationwide did not do what it's saying it did do?

SCRUGGS: What the Leonards got in the mail, like every other Nationwide policyholder, was if you have any questions about the scope of your coverage, contact your agent. In this case, it was Jay Fletcher. We put on more than half a dozen Jay Fletcher clients who were told the same thing by Jay Fletcher when they asked about flood insurance.

So Nationwide actually tells the homeowner to contact his agent for a policy interpretation. That's exactly what they all did. They don't remind anyone in writing or otherwise on an annual basis that there's a flood exclusion. And the fact of the matter is, a flood is a different phenomenon than a storm surge.

PHILLIPS: So, Paul, I know that you are very concerned about you and your family and your home. I know that's why you're pursuing this case. But no doubt, you have to have the thousands of others on your mind that have filed the same type of case, hoping this will affect them as well.

LEONARD: Yes, ma'am. Thousands of families displaced here on Mississippi Coast, and we're all concerned about this issue. We're all concerned the fact that we had a major hurricane strike the Mississippi Gulf Coast and we had storm surge with this hurricane. We didn't have a flood. We had a hurricane, and we're all trying to recover from that now.

PHILLIPS: And also, Dickie, Senator Trent Lott is your brother- in-law, he's a lawmaker. He lost his home there. Are you going to be able to influence him at all with regard to policymaking, to protect people like Paul and these other victims in the future?

SCRUGGS: Well, I sure hope so. He's a client of ours. He was denied coverage after losing his entire home and has a pending lawsuit against State Farm in his case. The insurance industry has treated everyone down here very similarly in terms of denying coverage just across the board.

I hope they don't treat the rest of the country like this when they have a mass disaster. This, though, is similar to what they did in California, and what they did after 9/11 in New York, is nickel and dime everybody and try to sweat them down economically before they settle up with them and we're not going to sit still for it.

PHILLIPS: I'll tell you what, we'll be watching the case. If indeed you win, it will be amazing what this does for other victims who have been trying to get money to repair their homes. Lieutenant Paul Leonard, Dickie Scruggs, I know you've got to go back in the courtroom. Sure appreciate your time today. We'll follow the case.

SCRUGGS: Thank you very much.

PHILLIPS: Straight ahead, Israel bombing airports in Lebanon. Hezbollah lobbing rockets into Israel. What the U.N. is doing to help quell the crisis, coming up next.

Plus, tears, fears, and questions. The latest on the aftermath of the train attacks in Mumbai, straight ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Israel bombing airports in Lebanon, Hezbollah lobbing rockets in Israel. This hour, the Israeli Defense Force reports that two rockets have hit the port city of Haifa.

Here's what we know this hour: Beirut International Airport shutdown. Israeli jets bombed all three runways and later hit two military bases. More than 70 rockets all fired from Lebanon struck several towns in northern Israel. At least one person was killed. Dozens were hurt.

And a U.N. negotiating team is on the way to the Middle East. A spokesperson for Secretary-General Kofi Annan says the team will urge all sides to show restraint and to protect the civilians there.

Now the Middle East mess is familiar territory for the United Nations, and Secretary-General Kofi Annan is taking action.

Our senior U.N. correspondent Richard Roth has an update for us -- Richard.

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Kyra, Secretary General Kofi Annan, who is in Rome right now, dispatching a senior three-person team to the Middle East to see if they can do anything about the events that seem to be spiraling a bit out of control. The team will be led by Vijay Nambiar, the U.N. senior special political adviser. Secretary-General Annan wanting to calm tensions, according to one of his spokeswomen here in New York.

(BEGIN VIDEO CLIP)

MARIE OKABE, U.N. SPOKESWOMAN: In concrete terms, we're looking for them to help implement the secretary general's repeated call for a cease-fire, for the release of the abducted, and for his constant urging for restraint.

(END VIDEO CLIP)

ROTH: Lebanon has asked for emergency meeting of the U.N. Security Council. That will take place tomorrow morning, Friday morning, an open debate with many speeches. The U.S. ambassador to the U.N., John Bolton, said that Israel has a right to protect its borders.

(BEGIN VIDEO CLIP)

JOHN BOLTON, U.S. AMB. TO U.N.: Well, I think the U.S. position was made clear by Secretary Rice yesterday, that they're responding to an act if terrorism and acting to a act of self-defense. And we'll see what happens during debate tomorrow.

(END VIDEO CLIP)

ROTH: The United States is also opposed to resolution that may be considered to a vote today, a resolution pushed by the Palestinians, demanding that Israel stop action in Gaza. The resolution, Kyra, has been balanced a bit, by calling for a halt of rocket attacks by Palestinians into Israel. It may not be enough to get Washington's approval. They have veto power. We have seen it used before on Middle East matters -- Kyra.

PHILLIPS: Richard Roth, I know you're watching this closely. We'll keep talking with you as this story develops. We're covering all angles in this Middle East crisis. CNN's Alessio Vinci is in Beirut, Lebanon. John Vause is on the Lebanese/Israeli border. Paula Hancocks is in Jerusalem. More live reports straight ahead.

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