UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-CV-81205-RAR

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiff,

v. 

COMPLETE BUSINESS SOLUTIONS 

GROUP, INC. d/b/a PAR FUNDING, et al.,

Defendants.

______________________________________/ 

ORDER DENYING DEFENDANT DEAN VAGNOZZI’S MOTION FOR 

LEAVE TO FILE DECLARATORY JUDGMENT COMPLAINT 

THIS CAUSE comes before the Court upon Defendant Dean Vagnozzi’s Motion for 

Leave to file a Declaratory Judgment Action Against Insurers of Eckert Seamans and John W. 

Pauciulo, Esquire (“Motion”). [ECF No. 1654]. The Court has reviewed the Motion, the 

Receiver’s Response [ECF No. 1665], Vagnozzi’s Reply in Support of the Motion [ECF No. 

1672], the Receiver’s Sur-Reply [ECF No. 1683], and the record. As explained herein, it is hereby 

ORDERED AND ADJUDGED that the Motion is DENIED. 

ANALYSIS

In the Motion, Defendant Dean Vagnozzi seeks relief from this Court’s stay of litigation 

provided for in the Amended Order Appointing Receiver, [ECF No. 141] ⁋⁋ 32–34, to permit him 

to pursue a declaratory judgment action against the insurance companies of the law firm of Eckert 

Seamans Cherin & Mellott, LLC (“Eckert Seamans”) and its former law partner, John W. Pauciulo 

(“Pauciulo”). In his proposed Declaratory Judgment Action, Vagnozzi would like this Court to 

determine the amount of insurance proceeds that may potentially be available to satisfy the claims 

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in his pending lawsuit against Eckert Seamans and Pauciulo in a Philadelphia state court action, 

Vagnozzi v. Eckert Seamans Cherin & Mellott, LLC and John Pauciulo, Philadelphia Court of 

Common Pleas Docket No. 2021002115.

Vagnozzi’s reliance on Edwards v. Sharkey, 747 F.2d 684 (11th Cir. 1984) and Fed.

Kemper Ins. Co. v. Rauscher, 807 F.2d 345 (3d Cir. 1986) is misplaced. In Edwards, the injured 

third party who was seeking to pursue a declaratory judgment action—unlike Vagnozzi here—had 

obtained a settlement with the insured. See Edwards, 747 F.2d at 687. In Rauscher, the insurance 

company—not the injured third party—was the party seeking a determination of the extent of its 

obligations under the insurance policy it issued to its insured. See Rauscher, 807 F.2d at 347.

Here, Vagnozzi cannot establish the Article III standing requirements necessary to pursue 

his proposed Declaratory Judgment Action in federal court. See Lujan v. Defenders of Wildlife, 

504 U.S. 555, 560–61 (1992). Vagnozzi is a third party to the insurance contracts between Eckert 

Seamans and its insurers and has not entered into a settlement with—or obtained a judgment 

against—Eckert Seamans and Pauciulo. Accordingly, because he is seeking to litigate declaratory 

judgment claims over potential losses that have not yet accrued and for which Eckert Seamans and 

Pauciulo might ultimately bear no liability, this Court declines to permit Vagnozzi to proceed with 

his Declaratory Judgment Action. 

Moreover, the determination of what insurance coverage may potentially be available to 

satisfy an injured third parties’ claims against an insured is a matter of state law. See, e.g., Miree 

v. DeKalb County, 433 U.S. 25, 29–33 (1977). Regardless of whether Florida or Pennsylvania (or 

some other state’s) law applies to the interpretation of the subject insurance policies, this Court 

finds that Vagnozzi may not raise the claims in his proposed Declaratory Judgment Action at this 

time. See, e.g., Colony Ins. Co. v. Total Contracting & Roofing, Inc., No. 10-23091, 2010 WL 

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5093663, at *2 (S.D. Fla. Dec. 8, 2010) (“While third-party claimants such as the Smiths can 

defend a declaratory judgment action against an insured, or intervene in a declaratory judgment 

initiated by an insurer, the Smiths have not brought any authority to this Court’s attention 

suggesting that they may raise their own claim against Colony at this time.”); Joseph Oliver 

Constr., LLC v. Utica First Ins. Co., CV 19-4352-KSM, 2020 WL 3791564, at *5 (E.D. Pa. July 

7, 2020) (“[A]n injured third party affirmatively seeking a declaratory judgment against an insurer 

lacks standing to do so.”).

While the Court recognizes the “tremendous emotional toll on Vagnozzi” that this litigation 

has created, Reply [ECF No. 1672] at 10, there are numerous individuals whose lives have been 

negatively impacted by the fraudulent actions taken by Defendants in this matter (of whom 

Vagnozzi was one). Even if Vagnozzi did have standing to file his Declaratory Judgment Action, 

the Court finds his proposed suit seeks the recovery of fees that are comprised of commingled 

investor funds that constitute Receivership Property. Thus, the relief requested would undercut 

this Court’s current stay of litigation and frustrate the Court’s ability to oversee the orderly and 

efficient collection and distribution of the Receivership Entities’ assets. In other words, Vagnozzi 

has not shown good cause to lift the litigation stay imposed by this Court. Accordingly, the Motion 

is DENIED.

DONE AND ORDERED in Miami, Florida, this 6th day of September, 2023.

________________________________

RODOLFO A. RUIZ II

UNITED STATES DISTRICT JUDGE

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