Sounds to me like Baby needs to spend time on a leash while in the house around the cats. This way you can stop her from chasing and praise her for hearing you. I wouldn't blame the old owners, some dogs just have a very high drive for things that look like prey like cats and othe small animals. You may never break that drive, but you can set rules in your house and insist she follow the rules. But first she has to spend some time learning what you expect, so leash her when she is out in the house and don't let the leash go. Tie it to your belt loop so she has to be with you. Now you will have her attention and can work with her listening skills and praise her for all of the right things she does, because she will have not chance to get in trouble.