Nonequilibrium molecular dynamics simulations are performed for a simple dipolar fluid under planar Couette flow. Under this shear flow, the fluid's spatial structure becomes distorted, and the pair distribution function is anisotropic. At low shear rates, the dipoles respond to this distortion by orientationally ordering along an axis where the fluid structure is most compressed, giving a shear-induced ferroelectric fluid state. At high shear rates above a critical value, the orientational order decreases. We argue that this disordering can be attributed to the onset of large fluctuations in the director's orientation about the compression axis at the critical shear rate. We also observe the director can "hop" between "up" and "down" directions along the compression axis. These hops are fast and infrequent events.