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The Gli proteins are critical components of multiple processes in development, homeostasis and disease, including neurogenesis and tumorigenesis. However, it is unclear how the Gli code, the sum of their combinatorial positive and negative functions, dictates cell fate and behavior. Using an antisense approach to knockdown gene function in vivo, we find that each of the three Gli proteins is required for the induction of all primary neurons in the amphibian neural plate and regulates the bHLH/Notch neurogenic cascade. Analyses of endogenous Gli function in Gli-mediated neurogenesis and tumorigenesis, and in animal cap assays, reveal specific requirements that are context specific. Nuclear colocalization and binding studies suggest the formation of complexes, with the first two zinc fingers of the Gli five zinc-finger domain acting as a protein-protein interaction site. The Gli proteins therefore appear to form a dynamic physical network that underlies cooperative function, greatly extending the combinatorial possibilities of the Gli code, which may be further fine-tuned in cell fate specification by co-factor function.
Neurogenesis from primary precursors or stem cells in vertebrates involves the specification of neuronal fates. One of the simplest models to study vertebrate neuronal specification in vivo is the development of the first neuronal circuits in the early frog embryo. These `primary' neurons arise soon after gastrulation and the formation of the neural plate, and form a basic network that includes the relay of sensory input to spinal motoneurons to insure an early escape response. Primary neurogenesis in the frog embryo results in the formation of three rows of neurons within the early neural plate: motoneurons close to the midline, sensory neurons close to the lateral edges of the neural plate and interneurons in between.
Several intercellular signaling pathways have been implicated in the control of neurogenesis in vertebrates, including the bHLH/Notch and retinoic acid pathways (e.g. Ruiz i Altaba and Jessell, 1991; Chitnis et al., 1995; Franco et al., 1999; Pierani et al., 1999; Sharp and Goldstone, 2000), as well as the Sonic hedgehog-Gli (Shh-Gli) pathway (Lee et al., 1997; Hynes et al., 1997; Brewster et al., 1998; Ruiz i Altaba et al., 1998; Franco et al., 1999; Lai et al., 2003; Machold et al., 2003; Palma and Ruiz i Altaba, 2004; Palma et al., 2005). The Gli proteins are obligatory mediators of Hh signals, but it is not clear how they act. It has been proposed that the crucial step is the overall read out of positive and negative Gli functions: the Gli code (Ruiz i Altaba, 1997; Ruiz i Altaba, 1998) (reviewed by Ruiz i Altaba et al., 2003).
Gain- and loss-of-function analyses in different species show: that the Gli proteins function in a context-dependent manner; that Gli2 and Gli3, unlike Gli1, harbor strong dominant-negative function in C-terminally truncated forms; and that there is partial redundancy (reviewed by Ruiz i Altaba et al., 2003). Dominant-negative assays in the frog neural plate and the chick neural tube indicate the requirement of overall positive Gli function for normal patterning (Brewster et al., 1998; Persson et al., 2002; Meyer and Roelink, 2003). Similarly, in mice, the phenotype of the double Gli2/Gli3 null, which does not seem to express Gli1, indicates a requirement of Gli proteins for proper neurogenesis and patterning (Bai et al., 2004), consistent with the absolute requirement in flies for Ci, the Gli homologue, in Hh-mediated patterning (Methot and Basler, 2001).
A problem in understanding Gli function resides in part on the difficulty of examining similar alterations for the three Gli proteins in any given system, as their functions are context dependent. The following summarizes current knowledge.
(1) Gli1 behaves as a positive activator. In frog embryos, Gli1 gain of function mimics Shh signaling (Lee et al., 1997; Ruiz i Altaba, 1998; Ruiz i Altaba, 1999). This result contrasts with the reported normality of Gli1–/–mice (Park et al., 2000; Bai et al., 2002), although minor embryonic defects are seen when compounded with mutation in Gli2 (Park et al., 2000). In zebrafish, however, Gli1 mutants have a phenotype (Karlstrom et al., 2003). Gli1 has been also reported to be superfluous for mouse tumorigenesis (Weiner et al., 2002), but it is required for the proliferation of human tumor cells (Sanchez et al., 2004).
(2) Gli2 can act as a positive or negative element in Hh signaling. In frogs, it can induce motoneurons while inhibiting floor plate and neural crest differentiation (Ruiz i Altaba, 1998; Brewster et al., 1998). In mice, it is mostly a weak activator of floor plate differentiation in the early CNS (Matise et al., 1998; Ding et al., 1998). Here, its function can be replaced by that of Gli1 (Bai and Joyner, 2001) but in zebrafish it harbors mostly negative function (Karlstrom et al., 1999; Karlstrom et al., 2003), although there is also evidence for limited positive effects (Tyurina et al., 2005). At late CNS stages, mouse Gli2 is required for normal brain growth and stem cell maintenance (Palma and Ruiz i Altaba, 2004). In humans, GLI2 is required for proper midline development with its loss of function leading to holoprosencephaly and pituitary deficiencies (Roessler et al., 2003), a phenotype with similarities to that of loss of Shh in mice and humans (Chiang et al., 1996; Belloni et al., 1996; Roessler et al., 1996).
(3) Gli3 can induce neurogenesis and repress neural crest and floor plate differentiation in the frog neural plate (Brewster et al., 1998; Ruiz i Altaba, 1998). In zebrafish, it can act as both an activator and a repressor in vivo, and can cooperate with or inhibit Gli1 functions in vitro (Tyurina et al., 2005). Mouse mutants for Gli3 display neural tube closure defects and polydactyly (Johnson, 1967; Schimmang et al., 1992; Hui and Joyner, 1993; Theil et al., 1999; Tole et al., 2000), the latter much like humans with a defective GLI3 gene (Vortkamp et al., 1991; Kang et al., 1997; Radhakrishna et al., 1997). Gli3 harbors strong repressive function, possibly in C′Δ forms (such as Gli2 and Ci, but not Gli1) detected in vivo (Aza-Blanc et al., 1997; Ruiz i Altaba, 1999; Shin et al., 1999; von Mering and Basler, 1999; Aza-Blanc et al., 2000; Wang et al., 2000). Gli3 plays a critical role in Shh signaling in the early neural tube as Shh inhibits Gli3 transcription (Ruiz i Altaba 1998) and, importantly, loss of Gli3 can partially rescue the phenotype of Shh mouse mutants (Litingtung and Chiang, 2000). In the brain, Gli3 is also required for growth and the regulation of stem cell behavior (Palma and Ruiz i Altaba, 2004).
Together, these data on patterning and cell type specification by the three Gli genes in different species demonstrate the importance of Gli function. The Gli code is thus thought to regulate the CNS homeodomain code, the latter being required for specification of different neuronal subtypes (Briscoe et al., 2000). However, the variable results make a unifying interpretation difficult. Similarly, their function in primary neurogenesis is not completely clear. Pan-Gli dominant-negative assays and gain-of-function analyses with individual Gli genes indicate that the Gli proteins are key components of neurogenesis (Brewster et al., 1998), but their individual requirement in the neurogenic program has not been determined. Here, we have used a knockdown antisense approach to determine the requirement of each Gli protein in cell fate specification, using primary neurogenesis as a model system.
Xenopus laevis were used and reared by standard techniques. Morpholino oligos (MO-C, CCTCTTACCTCAGTTACAATTTATA; MO-1, CGGGCGGACACTGGCGGGACGC; MO-2, GCACAGAACGCAGGTAATGCTCCAT; and MO-3, TAGTGCTACGGGACTGGGCTTCCAT) were microinjected at 20 ng/10 nl/embryo and capped synthetic RNAs were injected at 2 ng/10 nl/embryo unless otherwise noted, into the animal pole of one cell at the two-cell stage. lacZ RNA used as a lineage tracer was co-injected at <0.5ng/embryo. Animal caps were dissected from stage 8 embryos with a hair knife. Frog MOs do not recognize the human injected RNAs.
Gli1, Gli2, Gli3 and GLI1 cDNAs in pCS2 vectors (0.5 to 1.0 μg) and 1 μM of MO-C, MO-1, MO-2 and MO-3 were used to test for protein production using the TNT Coupled Reticulocyte Lysate Systems Kit (Promega) in the presence of 35S-methionine. The levels of specific Gli proteins were measured by autoradiography after 7% SDS-PAGE, immersion in Enhance (Amersham) and drying.
Whole-mount in situ hybridization was performed with digoxigenin-labeled single stranded RNA probes followed by nitroblue tetrazolium (NBT) plus 5-bromo-Y-chloro-3-indolyl phosphate (BCIP) (purple) substrates. Gli1, Gli2 and Gli3 (Lee et al., 1997; Ruiz i Altaba, 1998); Pintallavis (Ruiz i Altaba and Jessell, 1992); Sonic hedgehog (Ruiz i Altaba et al., 1995); Zic2, Slug, Snail and N-tubulin (Brewster et al., 1998) probes were as described. Other probes were made with the following enzymes: Xash3 (Ferreiro et al., 1994), NotI and T3; Xmyt (Bellefroid et al., 1996), BamH1 and T7; Xaml (Tracey et al., 1998), SalI and T7; and Sox3 (Penzel et al., 1997), EcoRI and T3. For β-gal staining, fixed embryos were incubated with X-gal substrates (purple red/pink precipitates) before dehydration with methanol.
5-bromo-deoxyuridine (BrdU 10 nl of 3 mg/ml; Sigma) were injected into three areas of stage 13 embryos previously injected with MO-3. Incorporated BrdU was detected immunocytochemically with diaminobenzidine (Hardcastle and Papalopulu, 2000; Dahmane et al., 2001). Mouse anti-BrdU antibodies (mouse from Becton Dickinson) were used at 1:100. Horseradish peroxidase-coupled secondary anti-IgG antibodies (Amersham) were used at 1:200.
Total RNA extracted from animal caps was denatured for 10 minutes at 65°C in the presence of random hexamer primers, immediately cooled in ice water, then reverse transcribed using SuperScript II reverse-transcriptase. Real-time PCR was performed with an Opticon™ machine (MJR). Reactions were carried out in 30 μl containing 1 μl of template, 200 nM of each forward and reverse primer, and 1 × IQ™ SYBR Green Supermix (BioRad). To quantify transcripts, dilutions of cDNA controls (from sibling embryos non injected) were run in parallel. All experiments were performed in triplicate.
Gli1, Gli2, GLI3 and Zic2 cDNAs were subcloned into Flag-tagged or myc-tagged vectors either as full-length clones or deletion mutants (Lee et al., 1997; Brewster et al., 1998; Ruiz i Altaba et al., 1999; Liu et al., 1998). Deletion mutations were carried out using restriction sites within the gene, resulting in the following constructs: GLI3N′ΔStuI (amino acids 1-390 deleted), GLI3C′ΔClaI (amino acids 745-1596 deleted), GLI3C′ΔXhoI (amino acids 558-1596 deleted), Gli2C′Δ (amino acids 559-1468 deleted), Gli1C′ΔPstI (amino acids 551-1397 deleted). Other deletion mutations were carried out using PCR: Zic2N′Δ (amino acids 1-260 deleted), Zic2C′Δ (amino acids 451-501 deleted), VP16Zic2ZF (Brewster et al., 1998), GLI3ZF1,2 (amino acids 473-547) and Zic2ZF1,2 (amino acids 270-351). Immunocytochemistry of transfected COS-7 cells was as described (Ruiz i Altaba, 1999).
COS-7 cells were transfected with indicated plasmids at 60% confluency with lipofectamine. Forty-eight hours post-transfection, cells were washed with PBS, lysed with RIPA buffer [150 mM NaCl, 1% NP40, 0.5% DOC, 0.1% SDS, 50 mM Tris pH 7.5, protease inhibitor cocktail (Sigma P-2714) plus 100 mM PMSF] and incubated with either 2 μl Flag Ab (Sigma F3165) or 10 μl Myc antibody (Santa Cruz, sc-789) for 1 hour at 4°C. ProteinA/G beads (20 μl; Santa Cruz) were added and incubated for 1 hour at 4°C. Beads were then washed four times with ice-cold RIPA buffer, sample buffer added, the mixture boiled and subjected to 10% SDS-PAGE, transferred onto membranes and probed with opposing antibody to immunoprecipitation. For immunoblotting, anti-Myc and anti-Flag antibodies were used at concentration of 1/250 and 0.5 μg/ml, respectively. Binding was visualized using ECL reagents (Amersham). Total protein from each experiment was run separately on SDS-PAGE gels for confirmation of protein expression and lack of degradation.
Several morpholino-modified antisense oligonucleotides (MO) were designed overlapping or adjacent to the initiator ATG of each Gli mRNA. Initial tests for efficacy of their ability to inhibit target mRNA translation used in vitro translation assays. 0.5 to 1 μg of pDNA encoding full-length Gli1, Gli2 or Gli3 frog (Xenopus laevis) cDNAs under the control of a CMV promoter (Lee et al., 1997; Brewster et al., 1998; Ruiz i Altaba, 1998) were mixed with 1 μM of each MO and subjected to in vitro transcription/translation in the presence of 35S-labelled methionine. An unrelated, control MO (MO-C) was used for all assays. Presence of the specific MO for each target sequence around the initiation ATG resulted in a significant reduction of radiolabeled Gli species (Fig. 1A). The MOs were specific for each target, although efficiencies appeared to vary slightly. The best three MOs were then chosen for further use.
Primary neurogenesis requires Gli1, Gli2 and Gli3. (A) PAGE analyses of in vitro transcription/translation of Gli1, Gli2 and Gli3 cDNAs mixed with 1 μM of each MO. (B) Percentage of reduction of N-tubulin+ primary neurons: motoneurons (M), interneurons (I), sensory neurons (S) and total neurons (T) in stage 14 embryos injected with each MO. Neurons were counted in the embryos with reduced N-tubulin expression. The percentage of each cell type was calculated by dividing the number of neurons on the injected side by the number of neurons on the control side. The statistical analysis was performed using Student's t-test. Error bars are s.e.m. (C-H) Examples of N-tubulin expression on stage 14 embryos injected (inj.) with MO-1 (C), MO-2 (D), MO-3 (E,G), MO-C (F) and MO-3 plus GLI3 RNA (H), the latter showing phenotypic rescue. The β-gal tracer is red.
In vivo tests were carried out by injecting 20 ng (∼60 nM assuming a volume of 4 μl for the embryo) of each MO into one cell of two-cell embryos. This allowed the uninjected cell, which gives rise to one side of the bilateral embryo, to always act as the internal control. All microinjections contained a trace of lacZ RNA to allow the unequivocal recognition of the injected half after X-Gal staining (e.g. red in Fig. 1D,E,G). Injections were performed into the animal cap region to favor targeting to the neural plate and ectoderm, bypassing effects on the role of Gli2 and Gli3 in mesoderm (Brewster et al., 2000). Diffusion of the injected MOs (25 bp) was different than that of the injected lacZ RNA (∼3000 bp; not shown), making the precise localization of high β-Gal expression in the injected half unimportant.
Injection of MO-C had minor effects, comparable with injection of tracer alone, on the development of primary neurons assayed at stage 14 through the expression of the neuronal-specific marker N-tubulin by whole-mount in situ hybridization (MO-C: 1% embryos with reduction of N-tubulin, n=16; Fig. 1F). By contrast, injection of morpholinos specific for Gli1 (MO-1), Gli2 (MO-2) or Gli3 (MO-3) inhibited primary neuron differentiation [MO-1: 66.7%, n=12 (Fig. 1C); MO-2: 50%, n=19 (Fig. 1D); MO-3: 83.9%, n=26 (Fig. 1E) embryos with fewer primary neurons than MO-C injected embryos] in all three populations. Quantification of the number of N-tubulin+ neurons per embryo in the injected half versus the uninjected half in each population is given in Fig. 1B.
The specificity of MO action was further proven by rescue experiments. Co-injection of 10, 5 or 2.5 ng of MO plus 1 ng of the corresponding Gli RNA resulted in an increasing number of rescued embryos with normal neuronal pattern: 16, 46 and 50% rescue for Gli1; 44 and 56% for the two lower amounts of MO for Gli2; and 25, 42 and 67% rescue for Gli3 (Fig. 1G,H; data not shown). Only one embryo injected with 1 ng Gli3 RNA plus 2.5 ng MO-3 showed ectopic neurogenesis, indicating that the MO rescues ectopic neurogenesis by the appropriate injected Gli RNA (and not by the other two Gli genes, see below) and Gli RNA rescues the suppression of endogenous neurogenesis by the appropriate MO.
Effects of Gli3 in neural plate patterning. Whole-mount in situ hybridizations on stage 14 embryos injected (inj.) with MO-C or MO-3 with probes as indicated on the left side of each panel. The β-gal tracer is red except in Pintallavis-MO-3 and the BrdU panels, in which it is blue. Arrows indicate the inhibition of Gli1, Xash3, XMyt1, Xaml, Slug and Snail expressions. Double-headed arrows indicate the size of the neural plate assessed by Sox3 expression. BrdU incorporation in stage 14 embryos injected with MO-3 is shown in brown. A high magnification panel (bottom right) shows BrdU incorporation in the neural plate of a unlilaterally injected MO-3+lacZ embryo.
Given the crucial role that the repression of the negative function of Gli3 plays in Shh signaling in the amniote neural tube (Litingtung and Chiang, 2000), we sought to test further the role of Gli3 in neural plate patterning.
Knockdown of Gli3 did not alter the expression of Gli2 (n=33) or of the midline markers Pintallavis (n=19) and Sonic hedgehog (n=20) at stage 14 (Fig. 2). It inhibited Gli1 expression adjacent to the midline (58%, n=19) and minimally its own transcription (6%, n=26), but not that of Zic2 (n=29) near the edges of the neural plate (Fig. 2). However it impaired the expression of the neural crest markers Slug (51%, n=29) and Snail (48%, n=33; Fig. 2). In addition, MO-3 inhibited the expression of the early bHLH neurogenic cascade genes Xash3 (43%, n=25) and Xmyt1 (26%, n=38; Fig. 2). The inhibition of neuronal populations was confirmed by the loss of Xaml (60%, n=28) expression, a marker of primary sensory neurons (Fig. 2). MO-3 slightly increased the size of the neural plate as judged by Sox3+ staining (65%, n=43), but did not appreciably change BrdU+ incorporation (n=35 embryos tested; Fig. 2 and not shown). This was evident comparing the injected and control halves of the neural plate and also in cases where there was cell mixing in the neural plate between expressing and non-expressing cells (Fig. 2).
Neurogenesis can be triggered by the activation of the bHLH neurogenic pathways, which specify neuronal fate, and by activated Notch signaling, which is involved in lateral inhibition (reviewed by Chitnis and Kintner, 1995; Kintner, 2002). Injection of neurogenin 1 (Ngn1a) RNA resulted in massive N-tubulin+ neuronal differentiation (Ma et al., 1996). Similarly, expression of NeuroD (Lee et al., 1995), another bHLH gene that acts downstream of Ngn1a also resulted in a strong neurogenic phenotype (stage 14-15; Fig. 3; Ngn1a+MO-C, 94% ectopic induction, n=34; NeuroD+MO-C, 79% ectopic induction, n=33). These phenotypes were reversed by MO-3 (Fig. 3; Ngn1a+MO-3, 89% reduction, n=28; NeuroD+MO-3, 86% reduction, n=29). In a second set of experiments, each Gli MO inhibited neurogenesis by co-injected Ngn1a RNA (stage 13; Fig. 3, right panels; Ngn1a+MO-C, 86% ectopic N-tubulin, n=70; Ngn1a+MO-1, 100% reduction, n=21; Ngn1a+MO-2, 100% reduction, n=43; Ngn1a+MO-3, 100% reduction, n=22, not shown). In addition, neurogenesis induced by a mutant form of Delta (Delta1Stu), which cell-autonomously inhibits Notch signaling and thus bypassing normal lateral inhibition (Chitnis et al., 1995; Chitnis and Kintner, 1996) (Fig. 3; Delta1Stu+MO-C, 75% ectopic induction, n=29), was reversed by MO-3 (Fig. 3; Delta1Stu+MO-3, 76% reduction, n=34).
Gli1, Gli2 and Gli3 are required for ectopic neurogenesis by activated neurogenic pathways. (Left panels) N-tubulin expression (purple) on stage 14-15 embryos co-injected (inj.) with Ngn1, NeuroD or Delta1Stu and MO-C or MO-3, as indicated. Arrows indicate ectopic neuronal differentiation caused by Ngn1, NeuroD or Delta1Stu. Panels show dorsal views and the β-gal injection tracer is in red/pink for Delta1Stu+MO-3. (Right panel) Lateral views of injected embryos at stage 13 showing the β-gal injection tracer in light blue. Ectopic neurogenesis as determined by N-tubulin expression (purple, arrow) is only detected after injection of 1ng Ngn1a RNA plus MO-C, but not after co-injection of Ngn1a plus MO-1 or MO-2. Dorsal side is upwards, anterior towards the right.
Misexpression of either frog Gli or human GLI proteins in the frog neural plate results in a neurogenic phenotype (Lee et al., 1997; Ruiz i Altaba, 1998; Brewster et al., 1998). We thus tested whether Gli1/GLI1-driven neurogenesis requires endogenous Gli function. Expression of frog full-length Gli1 and MO-C resulted in the ectopic differentiation of N-tubulin+ primary neurons (Gli1+MO-C: 79% embryos with ectopic neurogenesis, n=23; Fig. 4A,B), a phenotype that was diminished or abolished in all three neuronal populations by knockdown of each Gli protein (Gli1+MO-1: 15% of embryos with ectopic neurons, n=22; Gli1+MO-2: 27%, n=21; Gli1+MO-3: 0%, n=28; Fig. 4A). However, human GLI1-induced neurogenesis (GLI1+MO-C: 87%, n=22; Fig. 4C) did not require Gli2 (GLI1+MO-1: 50%, n=20; GLI1+MO-2: 79%, n=27; GLI1+MO-3: 14%, n=25; Fig. 4C,D). Quantification of the change in the number of neurons is given in Fig. 4B,D.
As a second test for the requirement of endogenous Gli function in Gli-induced processes we have used the induction of tadpole skin tumors by GLI1 (Dahmane et al., 1997). We have previously shown that expression of human GLI1 induces epidermal hyperplasias or tumors which are marked by the expression of β-gal from the co-injected lacZ tracer (Dahmane et al., 1997), and that co-injection with MO-1 inhibited tumor formation (Dahmane et al., 2001). As expected, injection of GLI1 and MO-C resulted in massive tumor induction and co-injection with MO-1 decreased the tumorigenic phenotype (Fig. 5A,B: GLI1, 88% tumor formation, n=59; GLI1+MO-1, 23% tumor formation, n=56). Paralleling the neurogenic results, co-injection of MO-3, but not MO-2, also reduced tumor formation (Fig. 5A,B: GLI1+MO-3, 19% tumor induction, n=51; GLI1+MO-2, 90% tumor induction, n=50).
To extend the results with whole embryos, we have used the animal cap assay to further test and quantify the specific requirements of each Gli gene in target gene induction. Gene expression was tested in pooled animal cap samples from sibling embryos after injection of each Gli RNA along with MO-C or MOs for the other Gli genes. The analyses were carried out in triplicate and quantified with real-time PCR. Animal caps expressing frog Gli RNAs plus MOs were collected at stage 12 and stage 14 to allow for a temporal comparison, while those expressing full-length synthetic human GLI RNAs plus MOs were collected at stage 14 to allow for a species of origin comparison. Tabulation of the results is shown for Gli plus MO-C as the ratio of the value of Gli plus MO-C over that in uninjected animal caps (asterisks in Table 1). The value of these numbers is not important, as it depends on the kinetics of the exact primer pairs used. However, a positive value means induction and a negative one repression. The values given for Gli plus MO-1, MO-2 or MO-3 is the ratio of the number for the specific combination of Gli plus MO over that of the same Gli plus MO-C, i.e. 1 means no change and therefore no effect after gene knockdown. As an arbitrary threshold, we have chosen to highlight changes of at least 40% with green representing activation or activator function and red representing repression or repressor function (Table 1). It is not known if the majority of these genes are direct targets or whether the Gli proteins act directly as bona fide transcriptional activators or repressors in all cases. The color of the values indicated with asterisks rows refer to the action of the exogenous Gli protein injected, the others refer to the inferred function of the endogenous Gli protein inhibited by the specific MO used. The results are summarized for Gli and neurogenic genes in Fig. 6.
Gli-induced neurogenesis requires endogenous Gli function. (A,C) N-tubulin expression on stage 14 embryos co-injected (inj.) with Gli1 or human GLI1 and each MO. Arrows indicate ectopic neuronal differentiation. The β-gal tracer is red. (B,D) Percentage change of primary neurons: motoneurons (M), interneurons (I), sensory neurons (S) and total neurons (T) in stage 14 embryos injected with Gli1 (B) or human GLI1 (D) and each MO. Neurons were counted in the embryos that showed a phenotype. The percentage of each cell type was calculated by dividing the number of neurons on the injected side by the number of neurons on the control side. The statistical analysis was performed using Student's t-test. Error bars are s.e.m.
One group of genes tested included the three Gli genes (Lee et al., 1997) as well as Ptc1 and Ptc2 (Takabatake et al., 2000; Koebernick et al., 2001), with Ptc1 being a target of Gli function (Agren et al., 2004) and a measure of induction of the Hh-Gli pathway (Table 1). Gli1 and Gli2 induced each other's expression at both stage 12 and stage 14. Gli3, however, induced Gli1 only at stage 14, while it induced Gli2 at both stages. At stage 12, Gli1 and Gli2 repressed Gli3 expression but at stage 14 Gli1 did not affect Gli3 expression and Gli2, by contrast, induced Gli3. Human GLI proteins induced all the frog Gli genes with the exception that GLI1 did not significantly affect Gli3 expression (Table 1, Fig. 6). All frog and human Gli proteins induced Ptc1 and Ptc2 at both stages (Table 1). Analyses of the requirement of the function of each Gli protein through the co-injection of individual Gli MOs revealed a more complex scenario (Table 1). We describe one case.
Gli3 was repressed by injected Gli1 at stage 12. At stage 14, injected Gli1 and GLI1 did not affect its expression. However, endogenous Gli1 acted as a repressor in the presence of GLI1 as here MO-1 induced Gli3 activation. Injected Gli2 repressed Gli3 at stage 12, but at stage 14 injected Gli2 and GLI2 induced it. However, injected Gli2 did so in a Gli1-dependent manner, while endogenous Gli2 acted as a repressor with injected GLI2. Finally, induction of Gli3 by injected GLI3 required Gli1 and Gli2.
GLI1-induced tumorigenesis requires endogenous Gli1 and Gli3 function. (A) Tadpoles injected with human GLI1 and each MO. Arrows show tumors in tadpoles injected with GLI1 and MO-C or MO-2. (B) Sets of tadpoles injected with GLI1 and MO-C or MO-3 showing varying overall deformities present in tumor-bearing GLI1+MO-C-injected embryos but absent in GLI1+MO-3-injected siblings. The β-gal tracer is blue.
Another group of genes tested comprises Ncam, Ngn1a, NeuroD and N-tubulin to reflect neural and neuronal determination and differentiation (Figs 6, 7). Ncam, a general neural marker (Balak et al., 1987), was repressed by Gli1 at stages 12 and 14 but induced by Gli3 at both stages. GLI2 and GLI3, but not GLI1, also induced Ncam. Ngn1a, an early and critical bHLH neurogenic factor (Ma et al., 1996), was induced by all Gli proteins from frog and human origin. By contrast, NeuroD (Lee et al., 1995) was repressed by Gli2 and induced by Gli3 at stage 12, whereas it was induced by all three Gli proteins from both species at stage 14, with the exception of GLI1, which acted as a repressor. N-tubulin, a marker of differentiated neurons (reviewed by Chitnis and Kintner, 1995), was also induced by all Gli proteins tested at both stages. As with the Gli and Ptch genes, the use of Gli MOs uncovered a complex regulatory network. One example is described.
Ngn1a was induced by all injected Gli proteins. However, at stage 14 but not stage 12, endogenous Gli3 acted as a repressor in the presence of injected Gli1. By contrast, endogenous Gli3 acted as a repressor at stage 12 and an activator at stage 14 in the presence of injected Gli2. Endogenous Gli1 was required for induction of Ngn1a by injected Gli2 at stages 12 and 14. Induction of Ngn1a by injected Gli3 required endogenous Gli1 at stages 12 and 14 but only endogenous Gli2 at stage 14. Its induction by injected GLI1 required endogenous Gli1 but Gli2 acted as a repressor. By contrast, endogenous Gli2 and Gli3 acted as repressors in the presence of injected GLI2. Finally, all three endogenous Gli proteins were required for induction by injected GLI3.
The results presented above suggest cooperative functional interactions in target gene regulation. To begin to investigate the basis of such cooperativity, we first probed the ability of Gli proteins to influence the subcellular localization of each other. Here, we took advantage of the finding that human GLI1 localizes to the nucleus, while frog Gli2 localized to the cytoplasm in transfected COS-7 cells (Fig. 7A,C,D) (Ruiz i Altaba, 1998; Ruiz i Altaba, 1999). Co-transfection of both GLI1 and Gli2 resulted in the preferential localization of Gli2 in the nucleus only when co-expressed with GLI1 (Fig. 7A,C). A similar result was obtained with human GLI3, which normally localized to the cytoplasm (Ruiz i Altaba, 1999) but became nuclear when co-expressed with GLI1 (Fig. 7C,D).
Zic proteins are members of the Gli superfamily that harbor a very similar five zinc-finger DNA-binding domain (Brewster et al., 1998; Nakata et al., 1998). Zic1 has been reported to enhance the nuclear localization of Gli1 and Gli3, and to affect protein function in vitro (Koyabu et al., 2001; Mizugishi et al., 2001). In vivo, Gli proteins and Zic2 interact to establish the pattern of the neural plate where Zic2 functions as an anti-neurogenic factor in primary neurogenesis (Brewster et al., 1998). We therefore tested whether Zic2 could also affect Gli localization in transfected COS-7 cells. Zic2 protein was nuclear (Brewster et al., 1998) (Fig. 7B) and its co-expression with frog Gli1, which is also heavily cytoplasmic (Lee et al., 1997; Ruiz i Altaba, 1999), Gli2 or GLI3 resulted in an increased nuclear localization of each of these Gli proteins (Fig. 7B,D).
Given the colocalization of co-expressed Gli/Zic2 proteins, we tested whether GLI3 could bind Zic2. Immunoprecipitation and western blot analyses of co-transfected Zic2 and different forms of GLI3 showed that full-length Zic2 can bind N- and C-terminally deleted forms of GLI3 (Ruiz i Altaba, 1999), as well as Zic2 itself (Fig. 7E). This focused our attention on the central zinc-finger domain. Zic1 and Gli proteins bind each other through their last three zinc fingers (Koyabu et al., 2001), a domain that represents the most highly conserved region in these proteins. This interaction may render the proteins unable to bind DNA as the last three fingers also represent the DNA-binding domain (Pavletich and Pabo, 1993). Unlike with Zic1 (Koyabu et al., 2001), we found that the first two fingers of Zic2 or GLI3 are sufficient to bind Zic2 and Gli proteins (Fig. 7F,G). Here, we used C-terminally deleted forms, which are expressed at higher levels than full-length Gli proteins and are therefore easier to detect (Ruiz i Altaba, 1999). The first two zinc fingers of GLI3 specifically recognized Zic2, Gli2 and Gli3, but not Gli1 (Fig. 7F). Similarly, the first two fingers of Zic2 recognized Gli2 and GLI3, but not Gli1 (Fig. 7G). Although other binding sites may exist, this specificity correlated with the ability of Gli2 and Gli3, but not Gli1, to harbor potent dominant-negative function, an activity shared with Zic2 (Ruiz i Altaba, 1999; Brewster et al., 1998).
Diagrammatic summary of Gli function. Frog proteins are in lower case whereas human proteins are in upper case. Green and red indicate activator or repressor activity. Arrows indicate induction and T bars repression. Thick lines refer to changes of fivefold or higher. The numbers next to the arrows or T bars indicate the requirement of the different endogenous Gli genes. The data derive from Table 1.
The first two fingers of Zic2 did not recognize full-length Zic2 (Fig. 7G). This result indicated a high degree of specificity and begged the question of whether Zic2 proteins could form complexes. Analyses of a variety of truncated and chimeric forms of Zic2 (Fig. 7H) showed that Zic2-Zic2 interactions occur through the N-terminal domain, unlike in the case of Gli-Zic2 binding.
Using a knockdown approach with specific antisense oligonucleotides we demonstrate here the involvement of each of the three Gli proteins in primary neurogenesis and uncover a network of cooperative interactions that regulates Gli function and target gene expression. Our data provide a framework to understand Gli function in cell fate specification, allowing for fine-tuned outputs and the specification of multiple cell types.
We have previously shown that there is a critical involvement of Gli function in the patterning of the neural plate, the CNS primordium (Lee et al., 1997; Brewster et al., 1998; Ruiz i Altaba, 1998; Ruiz i Altaba, 1999). The present data crucially extends this work by showing an unexpected requirement for each Gli protein in the induction of all primary neurons: motor, sensory and interneurons. Our results appear strikingly different from those obtained in mice, as loss of the function of any single or all Gli proteins in mouse embryos does not abolish neural tube neurogenesis (Bai et al., 2004). This difference could be due to the species-and context-dependent function of Gli proteins (e.g. Ruiz i Altaba, 1998; Ruiz i Altaba, 1999; McDermott et al., 2005). Indeed, Gli1 is not required in mice for development or tumorigenesis (Park et al., 2000; Weiner et al., 2002), but it is essential for frog embryo tumors (Dahmane et al., 1997; Dahmane et al., 2001) (this work) and human cancer (Sanchez et al., 2004). Similarly, Gli3 has a major negative function in the mouse neural tube, which must be suppressed by Shh signaling in order to allow ventral neuronal differentiation (Litingtung and Chiang, 2000), but here we demonstrate a sweeping positive role for Gli3 as a required component of primary neurogenesis. Evidence for positive Gli3 activity has been also described in gain-of-function analyses on amphibian primary neurogenesis (Ruiz i Altaba et al., 1998; Brewster et al., 1998) and in a limited fashion in the zebrafish, chick and mouse neural tube (Persson et al., 2002; Meyer and Roelink, 2003; Bai et al., 2004; Tyurina et al., 2005).
Cooperative effects and physical interactions within the Gli superfamily. (A) (Top left) Human GLI1 is nuclear in transfected COS cells, here detected with specific polyclonal anti-human GLI antibodies (Lee et al., 1997). (Top right) Myc-tagged Gli2 is cytoplasmic. (Bottom left) Co-expression of GLI1 and Gli2 results in nuclear localization of Gli2 (bottom right). (B) (Top panels) Expression of Myc-tagged frog Gli1, Myc-tagged-Gli2, Myc-tagged GLI3 and FLAG-tagged Zic2 in COS cells. (Bottom panels) Co-expression with Zic2 forces the Gli1, Gli2 and GLI3 cytoplasmic proteins into the nucleus. DAPI staining highlights nuclei (blue). The color of the font indicates the protein visualized by immunostaining. (C,D) Quantification of the subcellular compartmentalization of Gli proteins when transfected alone versus co-transfection with human GLI1 (C), and when transfected alone versus co-transfection with Zic2 (D). (C) Only nuclear values are given for co-transfection of Gli2 and GLI1 and for GLI3 and GLI1. (E-H) (Top panels) Immunoprecipitation of Flag-tagged proteins with anti-FLAG Ab as labeled, followed by western blotting with anti-Myc Ab. Arrowheads indicate the immunoprecipitated species. (Bottom panels) Corresponding western analysis of total Myc-protein input from transfected COS cells as labeled. The horizontal alignment of bottom panels corresponds to the molecular weight markers on the left.
The demonstration that all three Gli proteins are required for the formation of all primary neurons in the neural plate, together with Gli gain-of-function phenotypes (Lee et al., 1997; Ruiz i Altaba, 1998; Ruiz i Altaba, 1999) and the function of Zic2 as a prepattern anti-neurogenic factor (Brewster et al., 1998), allow us to suggest a further elaboration of our previous model for Gli function in primary neurogenesis: (1) combinatorial Gli/Zic function determines the sites of neuronal differentiation, the neuronal stripes (Brewster et al., 1998); and (2) the different neuronal types induced in different stripes depend on cooperative and quantitatively combinatorial Gli function. The Gli code thus integrates signaling inputs (e.g. Brewster et al., 2000), regulates the bHLH-Notch neurogenic cascade (this work) (Brewster et al., 1998; Franco et al., 1999) and affects neuronal type outcomes (this work) (Ruiz i Altaba, 1998).
Mechanistically, we show that the Gli proteins regulate neurogenic bHLH genes (Brewster et al., 1998) (this work), indicating that they act upstream of neuronal specification, consistent with their expression patterns: the Gli genes are co-expressed at low levels throughout the animal cap, the neural plate primordium, preceding the expression of neurogenic bHLH genes, and are later expressed in partially overlapping domains throughout the mature neural plate (Lee et al., 1997; Mullor et al., 2001). Primary neurogenesis therefore requires Gli function in different neural plate areas that display high and low expression levels, and/or in the neural plate primordium where Gli expression is low and ubiquitous. However, the Gli proteins are also required for neurogenesis directly induced by the ectopic expression of the neurogenic bHLH proteins and the Notch-Delta pathway, which modulates bHLH gene expression (Chitnis et al., 1995; Chitnis and Kintner, 1996), suggesting sustained function of the Gli proteins is required at distinct steps in the neurogenic cascade. This is also consistent with results with the involvement of Zic2 upstream and downstream of the bHLH neurogenic cascade (Brewster et al., 1998). Therefore, although it remains unclear exactly how Gli proteins regulate bHLH protein function – for example, by affecting co-factors or additional components, such as Id (e.g. Liu and Harland, 2003) or homeodomain proteins (Briscoe et al., 2000; Gershon et al., 2000), or by interacting with multiple bHLH proteins – the data highlight a multistep link between bHLH/Notch and Gli activities that is essential for neurogenesis.
In addition to neurogenic function, the Gli proteins have anti-neural crest activity (Brewster et al., 1998). Our previous work has shown that ectopic Gli2 or Gli3 function suppresses neural crest differentiation whereas Zic2 or dominant-negative GLI function induces it (Brewster et al., 1998), consistent with a general positive involvement of Zic proteins in neural crest development (Nakata et al., 1998). Unexpectedly, we demonstrate here that knockdown of Gli3, the Gli gene most prominently expressed in the neural folds, also suppresses neural crest differentiation. An explanation for this apparent discrepancy may reside in the fact that the MOs interfere with the action of both positive (activator) and negative (repressor) forms of Gli2 and Gli3, as the latter form post-transcriptionally. We propose that Gli repressor function at the edges of the neural plate, far from midline sources of Shh, is required to inhibit any positive neurogenic Gli function and thus allow for neural crest differentiation.
The quantification of target gene expression we present indicates that the Gli proteins act in a cooperative fashion that is dynamic, target gene and species dependent. The larger number of functional interactions observed after expression of the human proteins in comparison with those detected after expression of frog Gli proteins, would appear to result from the interplay of four Gli proteins (the three endogenous ones plus the exogenous one injected) versus the interplay of only three players (the injected plus the other two endogenous ones). This cooperative function of Gli proteins and their ability to influence each other's subcellular localization raise the possibility of the existence of protein complexes. In support of this idea, we show that the first two Gli zinc fingers can act as a docking site for other Gli proteins, possibly through the same domain. These findings offer a role for an evolutionarily conserved subdomain that had so far remained functionally orphaned and that shows a higher degree of variability within the Gli superfamily (Lee et al., 1997; Mizugishi et al., 2001) than the last three zinc fingers, which bind DNA (Pavletich and Pabo, 1993). In contrast to Gli-Gli and Gli-Zic interactions, Zic2 forms homocomplexes through the N-terminal region and not through the zinc-finger domain, showing specificity and suggesting the possibility of hetero-oligomers. Together, the data thus suggest the existence of a Gli protein network.
The ability of this protein network to act in a context-dependent manner is most probably reliant upon the availability of interacting co-factors. For example, the binding of Zic2 to C′Δ forms of Gli2 and Gli3, but not of Gli1, demonstrates specificity and suggests functional relevance, as Zic2 and C′Δ forms of Gli2 and Gli3, but not Gli1, have dominant repressive function (Ruiz i Altaba, 1999; Shin et al., 1999; Aza-Blanc et al., 2000). The overall read out of positive and negative Gli function, the combinatorial Gli code, may thus depend on the type of cooperative interactions present – the network – and the types of factors that dock on or interact with the network. These factors include Zic proteins (Brewster et al., 1998; Koyabu et al., 2001); Ski, which recruits the histone deacetylation complex (Dai et al., 2002); Suppressor of Fused (Kogerman et al., 1999; Ding et al., 1999; Dunaeva et al., 2003); Dyrk1 (Mao et al., 2002); and Hox proteins, some of which can impart activator function to Gli3C′Δ repressors (Chen et al., 2004). Shh signaling, and other signaling inputs (Brewster et al., 2000), may thus act on the Gli code by modifying the combination of Gli proteins that interact in a cooperative network and thus the possible factors that associate.
The cooperative and combinatorial function of Gli proteins may also be critical in cancer (e.g. Ruiz i Altaba et al., 2004) as endogenous Gli1 has been shown to be required for the induction of epidermal and neural tumors by exogenous GLI1 (Dahmane et al., 1997; Dahmane et al., 2001). Here, we extend these data and show that endogenous Gli3 is also required for GLI1-induced tumorigenesis. This finding is consistent with the ability of Gli3, as Gli1 and Gli2, to act as an activator in different contexts (Brewster et al., 1998; Persson et al., 2002; Meyer and Roelink, 2003; Bai et al., 2004; Zuñiga and Zeller, 1999; Zakany et al., 2004). However, the data also reveal a differential requirement for Gli2 and Gli3 as knockdown of Gli2, like that of the other Gli proteins, has drastic effects on target gene expression but it is not required for GLI1-mediated neurogenesis or tumorigenesis. Sustained Gli activity necessary for tumor growth thus appears to require the cooperative function of Gli1 and Gli3. This is interesting as ectopic expression of Gli1, but not Gli3, leads to tumor formation. Instead, ectopic Gli3 leads to supernumerary tail development (Brewster et al., 2000). As ectopic expression occurs at higher than endogenous levels, this result further suggests that the Gli code is both qualitative and quantitative.
We propose that the context-specific cooperative (this work) and combinatorial (Ruiz i Altaba, 1998) action of Gli proteins, forming a Gli network, is a general property and underlies a number of previous unexplained observations in different systems. In frogs, these include: the ability of co-injected Gli2 or Gli3 to inhibit ventral forebrain neuronal and floor plate inductions by exogenous Gli1; and the ability of exogenous Gli3 to inhibit motoneuron induction by co-injected Gli2 (Ruiz i Altaba, 1998). In the mouse neural tube, a Gli network could explain the requirement of Gli1 for positive Gli3 function (Bai et al., 2004). Similarly, in zebrafish and cell culture (Tyurina et al., 2005) a combinatorial and cooperative Gli network could account for the findings that: Gli3 cooperates with Gli1 to induce ventral CNS targets; Gli3 repressor function affects a number of targets differently; Gli3 and Gli2 inhibit Gli1-induced Gli reporter activation; but Gli3 enhances it in the presence of Shh while Gli3 alone is ineffective.
Finally, the finding that amphibian primary neurogenesis and tumorigenesis (Dahmane et al., 1997; Brewster et al., 1998) (this work), on the one hand, and adult mammalian stem cell neurogenesis (Lai et al., 2003; Machold et al., 2003; Palma and Ruiz i Altaba, 2004; Palma et al., 2005) and cancers of different organs (e.g. Dahmane et al., 2001; Thayer et al., 2003; Watkins et al., 2003; Sanchez et al., 2004) (reviewed by Ruiz i Altaba et al., 2004), on the other hand, depend on Hh-Gli signaling, further suggests the extension of a cooperative Gli network to other scenarios. These include stem cells, adult neurogenesis and cancer.
We thank Pilar Sánchez, Nadia Dahmane, Verónica Palma, Virginie Clement and Christophe Mas for comments on the manuscript and discussion; and A. Chitnis for the DeltaStu cDNA and E. Bellefroid for the Xmyt1 cDNA. V.N. was a recipient of a postdoctoral grant from L'Association pour la Recherche contre le Cancer. This work was supported by grants from the NIH-NINDS and the Louis Jeantet Foundation to A.R.A.
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In this insurance coverage declaratory judgment diversity action, Swift Energy Company ("Swift" or "Company") appeals from a summary judgment entered by the district court in favor of Mid-Continent Casualty Company ("Mid-Continent"). The district court found that Mid-Continent was not required to indemnify or defend Swift with regard to a lawsuit filed by Air Equipment Rental, Inc. ("Air Equipment" or "Contractor") employee Oscar Lozano ("Lozano") under any of the following: 1) the Master Service Contract between Flournoy Drilling Company ("Flournoy") and Air Equipment (the "Master Service Contract"); 2) the Master Service Agreement between Air Equipment, as Contractor, and Swift, as Company (the "MSA"); or 3) Commercial General Liability Policy CGL 212768, issued by Mid-Continent to Air Equipment (the "Policy"). Finding Swift to be covered as an additional insured under the Policy, we reverse.
Swift leased and operated an oil drilling site which included Well No. 62. Swift hired Flournoy to drill the well. Flournoy requested that Air Equipment provide a casing crew to install casing at the site. Accordingly, Flournoy and Air Equipment entered into the Master Service Contract, dated June 1, 1991. Swift and Air Equipment entered into the MSA, dated February 1, 1992. Mid-Continent issued the Policy to Air Equipment with an effectivepolicy period of January 1, 1996 to January 1, 1997.
However, in August 1997, Mid-Continent advised Flournoy and Swift that it would no longer provide a defense and indemnity in light of the Fifth Circuit's decision in Greene's Pressure Testing and Rentals, Inc. v. Flournoy Drilling Co., 113 F.3d 47 (5th Cir. 1997), which held that indemnity language identical to that contained in the Master Service Contract was unenforceable under the Texas Oilfield Anti-Indemnity Act, Tex. Civ. Prac. and Rem. Code Ann. '' 127.001-.007 (the "TOAIA" or "Act"). Swift argued that it was entitled to indemnity under the MSA, which contained different indemnity language, and as an additional insured under the Policy. Mid-Continent maintained it owed Swift neither a defense nor an indemnity, and provided neither.
In November, 1998, the district court entered summary judgment for Mid-Continent with regard to both Swift and Flournoy.2 The court held that the Master Service Contract was unenforceable under the TOAIA.3 The district court also found that the MSA was unenforceable under the TOAIA. It added that, even if the MSA was enforceable, it was inapplicable because Lozano was not working for Swift at the time of the accident. The district court also found that Swift did not qualify as an "additional insured" under the Policy, as Swift's liability did not "arise out of [Air Equipment's] ongoing operations for [Swift]," as the Policy's language required. Finally, the district court refused to consider Swift's claim that Mid-Continent should be waived or estopped from asserting its policy coverage defense. It noted that waiver and estoppel are affirmative defenses which must be asserted in a party's answer, see Fed. R. Civ. P. 8(c); id. R. 12(b), that Swift had failed to assert these defenses in its answer, and that Swift's motion to amend its answer to include waiver and estoppel had been properly denied as untimely.
We review the district court's determination that Swift was not covered as an "additional insured" under the Policy de novo. See National Union Fire Ins. Co. of Pittsburgh, Penn. v. Kasler, 906 F.2d 196, 197 (5th Cir. 1990) ("The interpretation of an insurance contract, including the question of whether the contract is ambiguous, is a legal determination meriting de novo review.").
In this diversity action, we must apply Texas law as interpreted by Texas state courts. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). In Texas, insurance policies are contracts and are controlled by rules of contract construction. See Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex. 1987). In interpreting a policy, the court's primary focus is to ascertain the true intent of the parties as expressed in the written document. See National Union Fire Ins. Co. of Pittsburgh, Penn. v. CBI Industries, Inc., 907 S.W.2d 517, 520 (Tex. 1995). If the language in a policy is Asusceptible to more than one reasonable construction, it is patently ambiguous." Barnett, 723 S.W.2d at 666; see also CBI, 907 S.W.2d at 520. A policy may be ambiguous even if its language is definite, if "the meaning and scope of the language is ambiguous." Barnett, 723 S.W.2d at 666 (holding that an insurance policy was ambiguous with regard to whether it included VA benefits); see also CBI, 907 S.W.2d at 520 (noting that latent, as opposed to patent, ambiguity arises when contract is ambiguous as applied to its subject matter). The question of whether a policy is ambiguous, as with other questions of policy construction, is a question of law for the court. See CBI, 907 S.W.2d at 520; Admiral Ins. Co. v. Trident NGL, Inc., 988 S.W.2d 451, 453-54 (Tex.App.--Houston [1st Dist.] 1999, pet. denied, Feb. 10, 2000).
In Texas, when an insurance policy is ambiguous or inconsistent, the construction that would afford coverage to the insured must govern. See Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 737 (Tex. 1990); Glover v. National Ins. Underwriters, 545 S.W.2d 755, 761 (Tex. 1977); Admiral, 988 S.W.2d at 454. Exceptions or limitations on an insurer's liability are construed "even more stringent [ly]." Barnett, 723 S.W.2d at 666 (holding that construction of exclusionary clause urged by insured must be accepted so long as it is "not unreasonable," even if insurer's construction seems "more reasonable or a more accurate reflection of the parties' intent").
Any person or organization for whom the named insured has agreed by written "insured contract" to designate as an additional insured subject to all provisions and limitations of this policy. . .
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liabilityarising out of your ongoing operations performed for that insured.
The named insured under the Policy is Air Equipment. Mid-Continent presents several arguments to support its position that Swift is not an "additional insured" under the Policy. First, Mid-Continent argues that the MSA is not an "insured contract" under the Policy, because it is neither enforceable nor applicable. Second, Mid-Continent argues that the liability to Lozano 1) was not "arising out of" Air Equipment's ongoing operations and 2) even if "arising out of" Air Equipment's ongoing operations, did not arise out of ongoing operations "performed for" Swift. We consider each of these arguments in turn.
A. MSA not an "Insured Contract"
Mid-Continent makes two arguments in support of its claim that the MSA does not qualify as an "insured contract" under the Policy. First, Mid-Continent argues that the MSA is not an "insured contract" because its indemnity provisions are unenforceable under the TOAIA. Second, Mid-Continent argues that the MSA is not an "insured contract" because it is not applicable.
We emphasize that Mid-Continent's first argument does not require us to determine whether Swift was entitled to indemnity under the indemnity provisions of the MSA. Rather, it requires us to answer the different question of whether Swift should be denied coverage as an additional insured under the Policy because the MSA is not an "insured contract." The presumptions involved in these different contexts are diametrically opposed. As the district court emphasized, under Texas law indemnity agreements are strictly construed in favor of the indemnitor (here, Air Equipment). See Safeco Ins. Co. of America v. Gaubert, 829 S.W.2d 274, 281 (Tex.App-Dallas, 1992, writ denied). By contrast, insurance policies are strictly construed in favor of coverage (for Swift). See, e.g., Barnett, 723 S.W.2d at 666; Kasler, 906 F.2d at198 (applying Texas law). Here, as Mid-Continent requests that we deny coverage under an insurance policy based on the term"insured contract" used therein, we must construe that term broadly. We conclude that the TOAIA does not preclude the MSA from being an "insured contract" under the Policy.
Even assuming that MSA were unenforceable under the TOAIA, it is highly unclear that the MSA's status as an "insured contract" would be affected. See Douglas R. Richmond & Darren S. Black, Expanding Liability Coverage: Insured Contracts and Additional Insureds, 44 DRAKE L. REV. 781, 793 (1996) ("There is a lack of case law addressing the effect of unenforceable indemnity language on insured contract coverage."). Both sides have feasible arguments. Swift argues that Mid-Continent intended to assume Swift's tort liability and thus that we should treat the MSA as an "insured contract" within the context of interpreting the Policy. See id. (AAn insured might argue that because it intended to assume the indemnitee's tort liability, the insurer should still cover the subject occurrence."); see also id. (noting that insurers should simply name the additional insured or otherwise draft clear policy language if they wish to exclude an indemnity provision which proves unenforceable from the definition of "insured contract"). On the other hand, if the indemnity provisions of the MSA are unenforceable, Mid-Continent never actually assumed Swift's liabilities. Arguably, then, the MSA would not qualify as an insured contract. See id. (AIf, conversely, the sole coverage touchstone is the existence of an insured contract . . . [u]nenforceable indemnity language in an incidental contract should excuse the insurer's obligations. Assuming no assumption of tort liability exists, there can be no insured contract coverage."). In light of the rule that ambiguous policy language is interpreted to find coverage, see Gonzalez, 795 S.W.2d at 737, the lack of relevant precedent and the existence of strong opposing arguments appear to dispose of Mid-Continent's argument that the MSA is not an "insured contract," even if we grant the assumption that the MSA's indemnity provisions are invalid under the TOAIA.
Out of an abundance of caution, we nevertheless assume without deciding that, if the MSA's indemnity provisions were clearly invalid under or offensive to the TOAIA, it might affect the MSA's status as an "insured contract" under the Policy. We find that the MSA's provisions are not so clearly contrary to the TOAIA as to preclude the MSA from being an "insured contract."
The TOAIA generally voids indemnity provisions which purport to indemnify a party against liability caused by the indemnitee's negligence and arising from personal injury, death, or property damage. See Tex. Civ. Prac. and Rem. Code Ann.' 127.003; Greene's, 113 F.3d at 50. However, the TOAIA contains an exception permitting indemnity provisions supported by liability insurance satisfying section 127.005. See Greene's, 113 F.3d at 50. Section 127.005 states that "mutual indemnity obligations" are valid if supported by, and limited to, "equal amounts" of insurance coverage provided by each party to the other. ' 127.005(a)-(b). In Greene's, the indemnity obligations were supported only by "available liability insurance" (emphasis added), which did not satisfy Section 127.005. Greene's, 113 F.3d at 50-51. Thus, the indemnity provisions were held invalid under the TOAIA. See id. at 51-52.
The MSA's language reflected the holding in Greene's. It provided that each party would "provide equal amounts of insurance . . . to support the indemnities voluntarily assumed in this Agreement." The MSA also expressly limited each party's indemnity obligation to the amount of supporting insurance that party was required to carry. Each party in fact obtained the insurance mandated by the MSA. Therefore, Greene's is not controlling. The MSA appears to comply with Section 127.005.
The district court nevertheless held, in addressing Swift's claim for indemnity underthe MSA, that the MSA's indemnity provisions violated the TOAIA.7 It noted that the language of the MSA required Air Equipment to indemnify Swift, "its parent, subsidiaries, affiliates, and partnerships, and its and their respective officers, directors, employees, and insurers and those with whom Company, its parent, subsidiaries, affiliates, and partnerships may be associates as co-lessees, partners, or joint venturers (hereinafter collectively referred to as -Company Group')." But Swift was only required to indemnify Air Equipment, "its parent, subsidiaries, affiliates, and partnerships, and its and their respective officers, directors, employees, and insurers (hereinafter collectively referred to as -Contractor Group')." The district court, noting that the listed Company Group included certain entities not listed in the Contractor Group, found that the indemnity obligation in the MSA is not mutual because "Air Equipment is required to provide indemnity for a greater group of entities than is Swift."
We need not decide on the district court's holding that Swift was not entitled to indemnity under the MSA.8 But the district court's reasoning is relevant to the question under consideration--whether the MSA is so clearly invalid under or offensive to the TOAIA that it cannot serve as an"insured contract" under the Policy.
Moreover, we believe that, as a factual matter, the district court's reading of the TOAIA might be unworkable. It is Swift's uncontroverted claim that 1) by industry practice, parties to contracts and subcontracts in a drilling situation attempt to fully indemnify each other, and 2) the operator group in a drilling situation will always be larger than the contractor group. Thus, if full mutual indemnification is to occur, the contractor will always be required to indemnify a larger group of parties than the operator. The district court's holding that such indemnification is by definition "not mutual" and therefore impermissible under the TOAIA appears to preclude indemnification in most, if not all, drilling situations in which such indemnification is now customary. In the absence of supporting authority, we decline to reach this seemingly radical result, particularly in the context of deciding whether the MSA is an "insured contract."
In sum, we believe that finding the MSA to be barred by the TOAIA and therefore not an "insured contract" under the Policy: 1) would run afoul of the presumption in favor of interpreting ambiguous insurance policy language (here, "insured contract") so as to find coverage; 2) is not sufficiently supported by the TOAIA, its legislative history, and related case law; and 3) seems imprudent as a policy matter. Therefore, we decline to find that the TOAIA precludes the MSA from being an "insured contract" under the Policy.
Mid-Continent also argues that the MSA is not an "insured contract" under the Policy because it is not applicable. Mid-Continent claims that the MSA's provisions were "never triggered" because Air Equipment was working for Flournoy rather than Swift at the drilling site.
It is unclear whether the "applicability" of the MSA, as defined by Mid-Continent, is even relevant to the question of whether the MSA was an "insured contract." Under the MSA, Air Equipment agreed to assume Swift's liability. Therefore, it appears that upon its execution by both parties the MSA became an "insured contract" under the Policy. The "insured contract" language in the Policy does not contain any limitations regarding the "applicability" of the indemnity contract (here, the MSA), or requiring that performance under the contract have begun at the time of the accident triggering liability. Moreover, Mid-Continent fails to present any authority showing that an indemnity contract must be "applicable" in order for the contract to qualify as an "insured contract" under an insurance policy. Mid-Continent also fails to support its implicit definition of an "applicable" contract as one under which performance had begun at the time the liability arose. In fact, Mid-Continent does not support its "inapplicability" argument at all, beyond arguing for the underlying predicate that Air Equipment in fact was performing for Flournoy rather than Swift.11 We find that the "insured contract" provision is at best ambiguous with regard to Mid-Continent's claim. We thus must apply the presumption that the provision be interpreted to provide coverage. See Glover, 545 S.W.2d at 761. Therefore, the MSA is not denied status as an "insured contract" under the Policy because it is "inapplicable".
Finding Mid-Continent's two arguments unavailing, we hold that the MSA was an "insured contract" under the Policy.
B. Liability to Lozano not "arising out of [Air Equipment's] ongoing operations performed for [Swift]"
Mid-Continent's argument with regard to the"ongoing operations performed for" language is conceptually best separated into two arguments: 1) Lozano's injuries did not "arise from" Air Equipment's operations at all, because Lozano's injuries were not the result of Air Equipment's negligence; 2) even if Lozano's injuries did arise from Air Equipment's operations, those operations were not being "performed for" Swift, but rather for Flournoy. We reject both of these arguments.
1. Liability to Lozano not "arising out of [Air Equipment's] ongoing operations"
First, Mid-Continent argues that the limitation "arising out of your ongoingoperations" indicates that the additional insured endorsement applies only to liability resulting from the negligence of Air Equipment, and excludes liability arising out of the independent negligence of the additional insureds.13 Mid-Continent bases its argument on Granite Constr. Co. v. Bituminous Ins. Co., 832 S.W.2d 427 (Tex.App.--Amarillo, 1992, no writ).14 As here, Granite concerned a services contract by which an independent contractor agreed to insure the other party as an additional insured. Pursuant to its contract to remove asphalt from Granite's construction site, Joe Brown Company (ABrown") named Granite an additional insured under its insurance policy, "but only with respect to liability arising out of operations performed for such insured [Granite] by or on behalf of the named insured [Brown]." Id. at 428. A Brown employee, injured when his truck overturned, sued Granite, claiming that Granite's negligence inloading the truck caused his injury. See id. The court denied coverage to Granite under the additional insured endorsement. See id. at 430. It emphasized that, under the underlying services contract, the loading operation was designated Granite's sole responsibility. See id. As the employee's allegations arose from the loading operations, in which Brown had no role, it did not "arise out of" Brown's operations. Id. The additional insured endorsement therefore did not apply. See id.
Northern Ins. Co. of New York v. Austin Commercial, Inc., 908 F. Supp. 436, 437 (N.D. Tex. 1994), applying Texas law, interpreted Granite to require a claim of direct negligence against the named insured in order to trigger coverage under an additional insured provision. Mid-Continent claims that Northern accurately interprets Texas law. As it is not disputed that Air Equipment was not negligent, Mid-Continent claims, the additional insured provision does not cover the liability to Lozano. We disagree.
Granite was rejected in Admiral Ins. Co. v. Trident NGL, Inc., 988 S.W.2d 451 (Tex. App--Houston [1st Dist.], 1999, pet. denied, Feb. 10, 2000). In Admiral, K-D Oilfield Services (AKD") contracted to provide crews to service Trident's facility. Pursuant to the services agreement, KD included Trident as an additional insured on its policy from Admiral, A-but only with respect to liability arising out of the named insured's [KD's] operations.'" Id. at 452, 454 (emphasis in original). A KD employee, preparing to perform maintenance on one of Trident's compressors, was injured when it exploded. See id. at 453.
Admiral noted that KD was not negligent and that neither KD nor any of its employees in any way caused or contributed to the explosion. See id. at 454. Relying on Granite, it argued that the injury therefore did not "arise out of" KD's operations and was not covered under the additional insured endorsement. See id. Trident argued that the term "arising out of" was not limited to instances in which the named insured was directly negligent. Rather, it was intended to cover all claims with a cause-in-fact relationship to the named insured's (KD's) operations. See id. ("Trident argues that the term -arising out of the named insured's [KD's] operations' was meant to provide Trident coverage for any claim that had a logical cause-in-fact connection with KD's operations.") Trident noted that the accident occurred while the KD employee was on Trident's premises as part of a service crew providedby KD. See id. It argued that the claim was therefore sufficiently connected to KD's operations to be covered under the additional insured endorsement.
The court agreed with Trident. It explained that the issue had been considered by numerous courts nationwide, and that Trident's was the majority view. See id. (ATrident relies on several cases from around the country construing almost identical -additional insured endorsement' language. The majority view of these cases is that for liability to -arise out of operations' of a named insured it is not necessary for the named insured's acts to have -caused' the accident; rather, it is sufficient that the named insured's employee was injured while present at the scene in connection with performing the named insured's business, even if the cause of the injury was the negligence of the additional insured."). See also, e.g., McIntosh v. Scottsdale Ins. Co., 992 F.2d 251, 253 (10th Cir. 1993) (finding city covered as additional insured with regard to injury suffered at festival because injury "arose out of" festival company's operations, even though city stipulated that it alone was negligent); Merchants Ins.-o. v. U.S. Fidelity & Guar. Co., 143 F.3d 5, 9-10 (1st Cir. 1998) (finding general contractor covered as additional insured with regard to injury suffered by subcontractor's employee because injury "arose out of" subcontractor's operations, even though injury was due to the general contractor's negligence); Douglas R. Richmond, The Additional Problems of Additional Insureds, 33 Tort & Ins. L.J. 945, 956-65 (1998) (addressing coverage for additional insured's sole negligence and noting that McIntosh's liberal interpretation is "fast becoming the majority rule", particularly under "broad-arising under' language").
The Admiral court also cited the Texas policy of finding coverage when the policy language is ambiguous. See id. at 455 (citing CBI, 907 S.W. 2d at 520). It held that, because the accident injured a KD employee on Trident's premises in connection with KD's business, it "arose out of" KD's operations and thus was covered by the additional insured endorsement. See id. The Admiral court expressly "disagree [d]" with Granite and Northern, " [t]o the extent to which they are contrary to this opinion. See id. at 454 n. 4.
In McCarthy Bros. Co. v. Continental Lloyds Ins. Co., 7 S.W.3d 725 (Tex. App-Austin, 1999, no pet. h.), another Texasappellate court was presented with the question of whether an injury to the named insured's employee "arose out of" the named ensured's operations even if due to the sole negligence of the additional insured. See id. at 730. In finding that the additional insured endorsement did apply, id., the court followed Admiral rather than Granite. See id. at 729 (quoting Admiral extensively and noting that Admiral was Ain harmony with interpretations given to -arising out of' in various jurisdictions.").
In addition to Admiral, the McCarthy court relied heavily on the Texas Supreme Court's recent Abroad construction [of] the phrase -arising out of'" in a different insurance context. Id. at 729. In Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153, 156 (Tex. 1999), while attempting to get into his parents' truck through a sliding rear window, a boy accidentally touched a loaded shotgun on a gun rack mounted over the window and shot a man sitting in an adjacent parked car. See id. at 154. The relevant insurance policy provided coverage for injuries "arising out of" the use of a motor vehicle. Id. at 155. The court found coverage. See id. at 158-59. It noted that the "arising out of" language required "a causal connection or relation" between the accident and the use of the vehicle. Id. at 156. However, as the McCarthy court noted, the required causal connection was not direct: "the direct cause of the injury stemmed from the boy's conduct in touching the gun." McCarthy, 7 S.W.3d at 729.
In McCarthy, an employee of Crouch, the named insured, was injured as a result of the negligence of McCarthy, the additional insured. See id. at 725-26. The insurance company suggested that the liability "cannot extend to negligence caused solely by McCarthy." Id. at 730. This is the prevailing interpretation of Granite and Northern. The court responded: "Post-Lindsey, such a restrictive interpretation no longer appears reasonable in Texas and cannot be used to create ambiguity." Id.16 The court added in a footnote that it "decline [d] to follow" Granite, in part because Granite was decided prior to Lindsey. Id. at 730 n. 9.
The court noted that the injured worker was at a construction project managed by McCarthy "for the purpose of carrying out Crouch's contract with McCarthy." Id. at 730. It found that this was the requisite "causal connection" between the injury and Crouch's work, such that the injuries "arose out of" Crouch's work for McCarthy. Id. at 730. Therefore, McCarthy was covered under the additional insured provision even if its sole negligence directly caused the liability. See id.
Even assuming that there is a direct conflict between Granite and Admiral and/or McCarthy, we are required to determine what the Texas Supreme Court would hold. See Erie, 304 U.S. 64. We believe the Texas Supreme Court would follow Admiral and McCarthy. They are consistent with the majority view in other jurisdictions. They are far more thoroughly reasoned. They comport with the Texas Supreme Court's recent decision in Lindsey. And they are far more consistent with the general principles of Texas insurance law. Mid-Continent could have expressly stated in the Policy that liability not resulting from Air Equipment's sole negligence was not covered by the additional insured endorsement. It did not do so. To read such an additional limitation into the Policy's language clearly seems contrary to the Texas rule that exclusionary language is narrowly interpreted, see Barnett, 723 S.W.2d at 666, and to the rule that ambiguous policy language is interpreted to find coverage, see Gonzalez, 795 S.W. 2d at737.
Here, when injured, Lozano was an Air Equipment employee on Swift's premises in connection with Air Equipment's operations. Under Admiral and McCarthy, Lozano's injuries therefore "arose out of" Air Equipment's operations. We reject Mid-Continent's argument and hold that Swift is covered as an additional insured under the Policy even though Air Equipment was not negligent.
Mid-Continent argues that Lozano and Air Equipment were performing work or services for Flournoy, not for Swift, at the time of the accident. Mid-Continent's argument relies on Section 1 of the MSA, entitled "WORK OR SERVICES COVERED." Section 1(A) begins by noting that "It is contemplated that from time to time . . . [Company] may request either orally or in writing that Contractor perform work or render services for the benefit or account of Company. In the event that Contractor agrees to undertake the performance of such work or services for Company, then the provisions of this Agreement shall govern." Section 1(D) adds that it is "the intent hereof that neither Company nor Contractor shall be bound by the terms hereof until work or services have been authorized by the Company and accepted by the Contractor." It is not disputed that it was Flournoy, not Swift, who called Air Equipment to request casing services. Flournoy was billed for, and paid for, Air Equipment's services.
The district court discussed this information in the context of determining whether Swift was entitled to indemnity under the MSA. Interpreting the language of Section 1 of the MSA to require that it be triggered by Swift's direct request for Air Equipment's services, the court concluded that "Air Equipment was not requested by Swift to perform the casing work at the drilling site." Having noted that indemnity agreements in Texas are construed in favor of the indemnitor (Air Equipment), see Safeco, 829 S.W.2d at 281, the district court concluded that the MSA's indemnity provisions did not protect Swift. We need not assess that conclusion.
But the district court relied exclusively on its discussion of the indemnity question in assessing the "performed for" language of the Policy's additional insured provision. In rejecting Swift's additional insured claim, the court noted the "ongoing operations performed for" limitation and simply stated, "As discussed above, it is uncontroverted that Swift's liability did not arise out of Air Equipment's ongoing operations performed for Swift." Without further explanation, the court concluded, "therefore, Swift does not qualify as an additional insured for the purposes of Lozano's injury and lawsuit." Clearly, in deciding the additional insured issue, the district court relied on its finding that Swift was not protected by the MSA because it had not directly requested Air Equipment's services.
The district court's approach is problematic in at least two ways. First, the MSA's language is not directly relevant to the proper interpretation of the Policy. Thus, the conclusion that the MSA's language requires a direct request from Swift to Air Equipment does not mean that a similar requirement should be read into the "ongoing operations performed for [Swift]" language in the Policy. The district court therefore erred in holding that the conclusion that the indemnity provisions of the MSA did not apply to Swift's liability to Lozano disposes of the question of whether Swift's liability "arose out of Air Equipment's ongoing operations" for Swift under the Policy. Second, the district court magnified its error by failing to consider that the presumptions involved in interpreting the indemnity provision and the additional insured provision are diametrically opposed. The district court noted, and apparently relied on, Texas law's strict construction of indemnityagreements in favor of the indemnitor (Air Equipment). See Safeco, 829 S.W.2d at 281 (cited by the district court). But the court failed to note, and apparently to consider, Texas law's expansive construction of insurance provisions in favor of the insured (Swift). See Barnett, 723 S.W.2d at 666; Kasler, 906 F.2d at 198.
We therefore reject the district court's conclusion. We find that Swift should not be denied coverage as an additional insured under the Policy because the liability to Lozano did not arise from Mid-Continent's operations "performed for" Swift. Clearly, Air Equipment's services were ultimately performed to benefit Swift. Air Equipment may have contracted directly with Flournoy, but Flournoy was merely Swift's subcontractor, such that all of Flournoy's operations were performed on Swift's premises for Swift's benefit. Given the absence of other applicable limiting language in the Policy (in contrast to the MSA), this fact alone likely is sufficient to find that Air Equipment's operations were "performed for" Swift.
Moreover, there is other substantial evidence in the record suggesting that Air Equipment's operations were "performed for" Swift. First, it is uncontroverted that, at the time of the accident, the well-operations had converted over to a day-work basis. After the day-work conversion, Swift began to directly control the details of the work. It seems clear that, at this time, Air Equipment was performing services directly for Swift.
Second, other parts of the record confirm the substantial role Swift, through its on-site representative, James Barnett, had in directing and controlling Air Equipment's work. One Mid-Continent internal memorandum discusses an interview with James Solomon of Air Equipment. The memorandum states that, "according to Solomon, James Barnett had instructed the Flournoy tool pusher and Lozano to install the casing" before the accident. Oscar Lozano's deposition testimony confirms the memorandum by stating that it was Barnett who told Lozano to begin his work-specifically, to begin running the surface casing on the well. Lozano relates another episode in which Barnett came to Lozano at the well site and began questioning Lozano about the quality of Lozano's "stabber." Barnett expressed concern about the stabber's qualifications and about the fact that Barnett had rarely seen the stabber on the site. When the conversation did not satisfy Barnett, Barnett directed Lozano to obtain another stabber, and Lozano agreed. Lozano's testimony provides no evidence of Flournoy's involvement in Air Equipment's work beyond the initial summoning phone call; it clearly suggests that Barnett was the primary supervisor of Air Equipment's services on the well-site. Correspondingly, Lozano termed the job he was doing "a Swift job," and added that "the company man [Barnett] is in charge" of the whole location.
In sum, we find sufficient evidence that Air Equipment's operations were "performed for" Swift that the "performed for" language in the Policy is at least ambiguous with regard to coverage of the liability to Lozano. We therefore interpret the language to find coverage, and find that the liability to Lozano did arise out of Air Equipment's operations "performed for" Swift under the Policy.
Lozano did not sue Air Equipment, although the employer did not maintain workers' compensation insurance at the time of the accident and, therefore, there was no bar to Lozano's including Air Equipment as a defendant.
Flournoy did not oppose Mid-Continent's motion for summary judgment and does not contest the summary judgment against it on appeal. Certain intervening parties had previously been dismissed without objection; those dismissals also are not before us. Swift was the sole remaining active defendant before the district court at the time of the summary judgment against it and is also the sole appellant.
This holding is clear from Greene's and is not contested on appeal.
The indemnity provision in the MSA specifically limits the indemnity obligations imposed under the MSA to the amount of insurance maintained by Air Equipment under the Policy. Thus, there is no separate claim for indemnity under the MSA beyond the $1 million limit contained in the Policy. Finding that Swift is entitled to recover as an additional insured under the Policy therefore renders it unnecessary to consider whether Swift was entitled to indemnity under the MSA. Swift's pleadings acknowledge this fact.
As Swift's claims of waiver and estoppel, even if successfully asserted, could have led to no greater recovery than that available as an additional insured under the Policy, it is also unnecessary for us to consider the district court's holdings with regard to those claims.
The Policy was set forth in Exhibit C to the MSA.
It is not contested that, if the MSA is an "insured contract," it is an insured contract by which Swift was "designate [d] as an additional insured," as the Policy language requires.
The district court never reached the MSA's enforceability under the TOAIA in the context of analyzing whether the MSA qualified as an "insured contract." In fact, it did not address the "insured contract" issue at all. In less than a page, the court disposed of Swift's claim as an "additional insured" on different grounds. See infra at subsection B (assessing district court's decision that Swift was not an "additional insured" because the liability to Lozano was not "arising out of [Air Equipment's] ongoing operations performed for [Swift]"). But Mid-Continent has presented both its arguments on the "insured contract" issue on appeal.
Mid-Continent has not argued that the "additional insured" provision is directly invalidated by the TOAIA. If raised, this argument would lack merit. In Getty Oil Co. v. Ins. Co. of North America, 845 S.W 2d. 794 (Tex. 1987), the Texas Supreme Court held that the TOAIA did not reach an "additional insured" provision even if the underlying indemnity agreement was void under the TOAIA. See id. at 803-04 (Aadditional insured" provision is a separate obligation that does not "directly support" an indemnity agreement, and therefore is not subject to the TOAIA); id. at 808 n.2 (Gonzales, J., concurring and dissenting) (" [T]his court has determined that an additional insured provision is not covered by the Anti-Indemnity statute."). We followed Getty in Certain Underwriters at Lloyd's London v. Oryx Energy Co., 142 F.3d 255 (5th Cir. 1998), holding that the TOAIA did not reach an additional insured provision even if the underlying indemnity contract, which expressly required that Oryx be named as an "'additional insured . . . to the extent of the indemnity,'" id. at 258, was invalid under the TOAIA. See id. at 259-60. Under Getty and Oryx, the "additional insured" provision of the Policy would not be invalidated by the TOAIA even if we found that the MSA was invalid.
As in Oryx, the MSA requires that Air Equipment "name Company [Swift] an additional insured, for liabilities and indemnities assumed by Contractor." Mid-Continent apparently argued in the district court, based on the "for liabilities and indemnities assumed by Contractor" language, that the "additional insured" provision in the Policy does not apply if the MSA's indemnity provision is invalid under the TOAIA. Oryx, rejecting a similar claim based on nearly identical language in the indemnity contract, appears to preclude this argument. See Oryx, 142 F.3d at 258 (rejecting claimed limitation on "additional insured" coverage under policy, based on indemnity contract's requirement that Oryx be named an additional insured under policy "to the extent of the [unenforceable] indemnity," because "there is no justification for an argument that Texas courts would engraft a limit on coverage to match the Texas law defense as if the suit were only to enforce the indemnity itself"). Moreover, Mid-Continent's argument for a coverage limitation is based on the language in the MSA requiring that "additional insured" coverage be obtained. But it is the Policy's language, not the language in the MSA, which governs the scope of the Policy. As Mid-Continent's argument does not implicate the Policy's language, it clearly fails to establish a coverage limitation. See, e.g., Barnett, 723 S.W.2d at 666 (discussing stringent standard applied in interpreting claimed coverage limitations).
The district court did not provide any legislative-history rationale for its holding. Mid-Continent notes that the purpose of the TOAIA was to address inequities in indemnity agreements in the drilling context, see Oryx, 142 F.3d at 259, and argues that the MSA is so inequitable that the TOAIA invalidates it. But the MSA's language, which complies with Greene's, is not necessarily inequitable. The economic realities of the drilling industry appear to dictate that the operator group, consisting of the operator and the other parties with which it contracts, will always be larger than the contractor group. This imbalance cannot be addressed within a full-indemnification contract. Yet both parties to the MSA, and to other similar contracts, nevertheless freely agreed to fully indemnify each other's group. Each party had strong reasons for pursuing such indemnification, in light of the complexity and uncertainty involved in drilling operations. Mid-Continent's argument does not persuade us that the MSA cannot serve as an "insured contract."
Mid-Continent makes a related argument on which the district court did not rely: that the parties Air Equipment is required to indemnify are not Swift, its "contractors," and their "employees," as required by the TOAIA. See ' 127.003 (Amutual indemnity obligation" defined as when the parties "agree to indemnify each other and each other's contractors and their employees"). This is not compelling. Swift will clearly have contracts with any "co-lessees, partners, and joint venturers" in its drilling operations governed by the MSA. Mid-Continent presents no authority to support the construction that those parties are nevertheless not "contractors" under the TOAIA. Accordingly, we are not persuaded to deny coverage.
Even if Mid-Continent had shown that the "applicability" of the MSA determined its status as an insured contract, and even if we accepted Mid-Continent's definition of an "applicable" contract as one under which performance had begun, we would nevertheless reject Mid-Continent's conclusion that the MSA was "inapplicable." We do not agree that, under the Policy, Air Equipment unambiguously was not working for Swift at the time of the accident. We analyze this question in the context of deciding whether the liability to Lozano "arose out of" Air Equipment's "operations performed for" Swift.
The district court did note that it was "undisputed that Lozano, as Air Equipment's employee, was performing work or services on Swift's property." Thus, the "ongoing operations" language is not an issue.
The Policy does not define the phrase "arising out of your ongoing operations," or any part thereof.
While Mid-Continent raised this Granite-based argument separately in the district court, the district court did not rely on it in finding that Lozano's injuries did not "arise from [Air Equipment's] operations performed for [Swift]." Indeed, the district court did not mention Granite in its opinion. The district court instead relied upon the argument that Air Equipment's operations were "performed for" for Flournoy, not Swift. Mid-Continent nevertheless renews the Granite-based argument separately on appeal.
The MSA defines the"work" and "services" to be provided by Air Equipment (AContractor") to Swift (ACompany") as any "business activity of Contractor which requires that its employees . . . enter upon or utilize any property or premises owned (in whole or in part), leased, chartered, or operated by Company." Therefore, as Lozano was an Air Equipment employee on premises leased by Swift, the work he was performing appears by definition to have been Air Equipment's work under the MSA.
The court noted that, even if the insurance company could create ambiguity, it would still lose.

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