There are several errors in Sitecore's Azure toolkit. Main thing with your problem is that in the file "Sitecore.Cloud.Cmdlets.psm1" there is a try/catch/finally which tries to delete a temp file in the finally block, but does not check for it's existence before trying to delete. This causes you to see that error, but in fact you are most likely getting an error from the actual deployment which is not shown due to the bad implementation.
Try doing this in the "Sitecore.Cloud.Cmdlets.psm1" file's "finally" section (and also report it as yet another error to Sitecore support):
if ($paramJsonFile) {
if(Test-Path -Path $paramJsonFile)
{
Remove-Item $paramJsonFile
}
}
Also be aware that Sitecore are using the legacy version of the Azure powershell module, so if you as I am, are using the AZ module, you have to enable AzureRM alias support : see here : https://docs.microsoft.com/en-us/powershell/module/az.accounts/enable-azurermalias?view=azps-3.7.0
Hope it helps.